This bug has been around for a while: with BrowseForFolder method, when New Folder is created, no matter what name you pick, it always shows in the dialog as New Folder (even though it is named correctly in the system). So on the first go it is not possible to pick the newly created one as a destination folder.
Now when I tried all works fine, but just last night it was not remembering the new name (now no matter if I press ENTER or just click-away, the name stays). But I definitely recall the name not sticking many times in the past. I will see next time if I can reproduce it in a reliable way, and if so, report back. For now, thanks for the feedback !