BYOND Version:479
Operating System:Windows XP Pro
Web Browser:Firefox 4.0
Applies to:Dream Maker
Status: Resolved

This issue has been resolved.
Simple bug really. If it's a bug at all.
File ->New Environment
You will be prompted with:
Directory: C:\Documents and Settings\Username\Desktop
Name: ______

When entering the name as a subfolder.. Ex:

It only creates Desktop\NewGame\

If this isn't a bug I'll gladly post it as a feature request. :3
This sounds more like user error than a bug or missing feature, though I'm not sure I understand the issue 100%
You mean this:

Creating a new Environment in a Subfolder in the desktop for example Environment\My Games\

And it creates only the "My Games" Folder?

Correct me if i'm wrong.
That's what I mean Ocean. Since this was moved to Features, I guess that was intended behaviour. I hope this is a feature added sometime in the future!
Ter13 resolved issue