Strange folder sharing error on Windows 2008 R2

Hi,

Ok I have a strange anomoly which I am hoping to get a specific explination for.

If I do the following steps:

Create a directory  C:\MOE
Share that directory as MOE
Create a sub folder under C:\MOE called Test1
Then I change the permissions on C:\MOE\Test1, say grant a user Full Control.

Then I try to delete the folder (Test1) in explorer I get the following message:

------------------------------------------------
Sharing

This folder is shared with other people

If you delete this folder, it will no longer be shared.

Folder: C:\MOE\Test1
Share Name: Test1

----------------------------------------------------------

So my questions are why does this error come up if Test1 is not specifically shared. In fact,
if I do a net share then I don't see it listed. (The issue seems to appear once I set
the permissions, if I never change it I don't get the error).

I have made a little batch file that can reproduce the problem. So people can try it out.

So I am looking for

1: A good techincal explination on why this happens.
2. Is there a difference between the shares that appear in the "Network Folder Sharing" and
the dialog below. It seems I can have a share "shared" in the top part but not the bottom while having the Advanced sharing part blank.

net share MOE /delete
rd C:\MOE /s /q
md C:\MOE
net share MOE=C:\MOE
md "C:\MOE\Test1"
icacls.exe "C:\MOE\Test1" /grant "ENT\User1:(OI)(CI)(F)"

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