Time to revisit this issue.
Neither 3.50 (OS/2) nor 3.40 (Win) will create a directory when invoking the Convert option within the FOC.
If I select one or more files in the FOC, RMB and choose Convert:
When I select "Convert", I receive:
I have tried this with both local and network drives (all with plenty of space, and not write-protected).
This is consistent both my W98SE and W4 boxes.
On my XP box at work, running either 3.4 or 3.5 (I don't recall which), PMV will sometimes pop up a dialogue and offer to create the dir, but invariably can't do it.
My workaround for a long time has been to pre-create a "work" dir under whatever dir I wish to open in the FOC, but it's a hassle.
Is this able to be reproduced on your end?
Hooray! That's fixed in 3.51 (tested the OS/2 version just now).
Can you trigger a refresh of the left directory nav pane when PMV creates a dir, so it reflects the new dir without having to switch panes and <F5>?
Perhaps the Win version already updates -- a feature of the OS. I'm referring to the OS/2 version here, as I know OS/2 has no API hook for having the OS notify the app when a file is deleted/added or when directories are changed.
For the OS/2 version:
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