I didn't realise that was the way it was supposed to work. OK, I've just tested this again more thoroughly.
In my personal trial zenfolio account (only a couple of groups and galleries with a very simple directory structure) it works fine, and with the work premium plan account (with about 30 groups and about 10 galleries in an alphabetised directory structure ie. Preview_Files>A>AClient>AClientsGallery) it works fine if you make a gallery anywhere but the [root] directory. When I make a gallery in [root] the new gallery displays as selected then after about two seconds, the uploader reselects a previous non root gallery of it's own accord. The reverted selection gallery appears to consistently be the first gallery in the drop down list.