Not sure if this is a bug, but when a cloud album is "archived to local storage" and the option to organise is "Copy cloud album structure", the cloud album folder is ignored.
So if a cloud album "Test" which is in a cloud folder "Misc" is archived, then only the "Test" part of the structure is created in the local filesystem eg photo archive > Test. Ideally it should be photo archive > Misc > Test to fully recreate the cloud album structure.