Can someone confirm that UNC paths work for thumbnail creation from folder.jpg album art?
It works if the modified or new folder.jpg is actually embedded in the file and the file is indeed imported. Check in tags to see that "
image in file" is indicated under the field [Image File] and is not empty. If you see a filename there, something is not on ... I have a messed up FLAC file which is truncated and cannot add artwork to the file adn it show folder.jpg in the Image File field as an example.
you can set up a smartlist to check by importing this to check for blank or bad embeds ...
[Media Type]=[Audio] -[Image File]=[Inside File]
then you can simply use cover art =>Quick find in file directory and sort it out in one go. You might have to re-build your thumbnails or configure auto-import to do so afterwords
If this is your issue and providing your configuration is set to the folder.jpg audio option, what I like to do is always copy the image and paste it using the cover art tool. Then you can just select all of them and use "save cover art to ...", again under the cover art tool (right click); it should be automatic after the first time but I tend to do it manually as part of my work flow to be sure.
If this is not the issue get back after checking the integrity of the files. (If you need a tool I can find one that works pretty well, I use audio tester that you can get here
http://www.vuplayer.com/other.php)