File/folder permissions in v0.9.37 odd behavior

[Mike Giovaninni]

Environment: Windows Server 2008 Standard

FileZilla Server v0.9.37beta

Creating user accounts with the following structure:

Parent (Home) folder with Read File rights and List Directories & Subs
Child Folder 1 (Files from client) w/ R/W/D File rights & List Dir/Subs
Child Folder 2 (Files to client) w/ R File rights only and List Dir/Subs

In this configuration, a 550 error is generated on child folder 1 when the client tries to upload or delete a file

However, if the Parent folder has the Write and Delete attributes set, the client can write and delete files.. but in BOTH child folders, not just child folder 1.

Which tells me that there is a permissions issue in the server daemon. Based on a simple file permission model, I should be able to set the parent directory to allow only reads and directory listings, and then set my child folder permissions to the task they hold (i.e. writes only allowed in the folder I chose based on the granted permissions).

Note - all file paths are short, do not include spaces or special characters and are being accessed directly (not via a network share) if that helps...

I can't seem to find anything in the general server configuration that would cause this to break.. or.. is this working as according to design?