Kirk,
I am moving the folder by drag-and-drop within the 'Favorites' part of PhotoMechanic (as shown in the screenshot).
My use case is edit and caption the photos in a folder, e.g. ,'250529_spo_tennis_roland-garros_li-peguila', transmit the edited photos via the ftp command from PhotoMechanic to my photo database, and then move the folder into, e.g., the 'Edited' folder. If something I goes wrong, I go back to the still open but moved contact sheet. It is then that I get the shown error message.
Hope this helps.
-Claude