Don't know if this is a feature request or a bug so please correct me if i'm wrong.
Anyways, the "Override Profile Paths" feature is working as intended but even if you are using the option, the default folders (like the ones for IPL ROM, Backup memory, Etc.) ends up being created the next time the user boots the emulator anyway.
It would be preferable if the emulator doesn't do that when you're using the option for the profile paths.