When you perform the subject operation, the folder is copied but its' files are not.
This is caused by a bug in Windows 95, that can also affect server based profiles.
To resolve the issue, download:
SYNCENG.DLL version 4.00.951 dated 7/16/96 55,296 bytes
See http://support.microsoft.com?kbid=161020 - Implementing Windows 95 Updates