when this "cover art" location is pointed into a folder path that may have other purposes
There is your problem. MC did exactly what I would have expected.
Never, ever, EVER use an existing location for MC Cover Art, or put other stuff in there, or for goodness sake ever set the location to the root directory of a drive, then change the location. MC Will delete everything on your drive if you do!
The MC Cover Art location is a managed location, for use by MC, and only by MC. When you change the Cover Art location in MC Options, it will move the subdirectories it knows about to the new location that you defined, which should be a new empty subdirectory somewhere,
and then it will delete the source directory. Completely. No Recycle Bin. Just gone.
When I have changed the Cover Art location, I always create a new "Cover Art" subdirectory via the change dialogue, and make absolutely sure that the "Select Folder" box at the top reflects this new location, as it won't when you first create that subdirectory. You need to click on another location and then back to the new subdirectory, or create the new subdirectory externally to MC, and then browse to it.
Lesson learned.