Lr creates a new folder above mother folder when editing.

Another strange problem I'm having.

I have photos orgasnised by date i nested folders. Then I select those I want to edit further in Ps. Usually once I edit and go back to Lr, these photos are stacked with the original in the same folder. Now Lr is creating a new/duplicating folder above the mother folder with the newly edited photos. I'm not able to drag those photos back into the origianal folder as it says they are already there, but Lr is showiong this duplicate folder.

In the screen attached, you can see this with the "134_summers_perth" folder. The one on top was never created by me, it was created by Lr after I edited them in Ps. I do not want this mess to happen to my files.

Any ideas?

Give me a hammer.