19349d4 created the issue

Here's what I did to reproduce this:

1. Log into my Rackspace Cloud Files account using my Swift bookmark (note: I'm not paranoid enough to think this only affects my account - other Rackspace Cloud Files accounts may very well see the same results).
2. Right-click in the browser window and select "New Folder..."
3. Enter the name "testcontainer" and click "Create".
4. Double-click "testcontainer".
5. Right-click in the browser window and select "New Folder..."
6. Enter the name "folder1" and click "Create".
7. Drag/drop a file from Windows Explorer into "folder1".
8. Wait for the file to finish uploading.
9. Right-click in the browser window again and select "New Folder..."
10. Enter the name "folder2" and click "Create".
11. Drag/drop "folder1" into "folder2".

Expected result:
folder1 is moved into folder2, along with all its contents. Happy face :-)

Actual result:
folder1 is deleted without any warning, along with all its contents. Sad face :-(

I can personally testify that this bug also occurs if multiple folders are dragged/dropped, those folders containing their own subfolders and over 500 files totalling around 2.1GB in size. That would be how I discovered the problem in the first place.