Comment 9 for bug 915165

I'm experiencing the same issue, but after doing some more testing I found it only happens in my user account.
The test case is as follows:
1) Make sure you don't have any subdirectories in ~/Downloads
2) Set transmission to use ~/Downloads as the target directory
3) Create an empty directory under ~/Downloads
4) Open transmission's preferences dialog
In my user account, after doing this, the target directory for downlaoded files is automatically set to the deepest subdirectory under ~/Downloads.

However, if I do the same in the "Guest" account, everything works as expected, and transmission keeps the target directory correctly.

I tried to reset the configuration by:
rm -r ~/.config/transmission
but the problem is still happening.

I suspect this is not a bug from transmission. I tried to debug it, adding some output in the GTK+ callbacks and the functions that manipulate the app's settings. It looks to me like GTK+ file_chooser_button widget is firing the event positioning itself in the wrong directory, thus confusing transmission. As far as I could understand transmission code is handling the path correctly.