When using the DeleteEmptyFolders registry key, the system can mark the deleted items folder as deleted if it currently contains 0 items (deleted=1 in the ArchiveFolder table).
Once that change is synched down to Virtual Vault, and a user subsequently soft-deletes an item in VV, the folder is not recreated/relinked correctly. The user will see a folder with the correct icon, but with the previous folder’s VaultEntryID as its name.
This issue has been addressed in the following release:
Enterprise Vault 10.0.4 Cumulative Hotfix 3 Release
Enterprise Vault 11.0 0 Release Details