Download target folder changes without user's consent

[theadmin]

I have Transmission set to download files to my ~/Downloads directory (which makes sense). Now, if any subfolder is created within that directory, Transmission sets the target dir to that. This is absolutely impossible to "fix" manually. I've tried editing the config file, using the Preferences window of Transmission, etcetera, but upon relaunching Transmission, this starts to happen again.

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: transmission 2.51-0ubuntu1.3
ProcVersionSignature: Ubuntu 3.2.0-39.62-generic 3.2.39
Uname: Linux 3.2.0-39-generic x86_64
ApportVersion: 2.0.1-0ubuntu17.1
Architecture: amd64
CheckboxSubmission: 16d87d9f7c91aa9a8b6f43848442512d
CheckboxSystem: d00f84de8a555815fa1c4660280da308
Date: Sun Apr 7 22:11:08 2013
InstallationMedia: Xubuntu 12.04.1 LTS "Precise Pangolin" - Release amd64 (20120817.3)
MarkForUpload: True
PackageArchitecture: all
SourcePackage: transmission
UpgradeStatus: No upgrade log present (probably fresh install)

[theadmin (theadmin-)]

I've just verified it with the official latest stable Transmission build and it doesn't happen there.