Need to know what your view settings are - otherwise diagnosing this could be difficult.
OK, so the view's settings are 'Categories', list style is 'Thumbnails'. The base file path is "M:\Musik\" where I have subfolders named by music genre, e.g. "Rock, Pop, Jazz, Classical" etc, containing folders for artists and albums. As a result, the view shows me tiles (thumbs) representing the contents of each subfolder level, and double clicking a tile takes me to the next folder level beneath...
The image I posted shows the content of the folder 'Mozart', so the full path (shown in the tab title bar) should read "M:\Musik > Classical > Mozart"...
To be exact, I've just checked again, and it actually does show the right path when I first navigate to it, but when I go back (upwards) it tends to forget the current location, so simply repeats the parent folder name...
Hope this helps ;-)