I've switched to the portable version, which solved the corruption.
After re-reading threads on here I was able to get your THL going, and after a little experimentation I think I've gotten a good enough sense of how to build relationships between tags that I can create a THL based on the genre/subgenre/etc hierarchy I'm in the process of building as I import reorganized pieces of my library.
The point I'm still stuck at is that as far as I can tell I've structured my THL properly, but when I switch from another THL to mine the explorer panel goes from working to simply displaying "All" with no further nodes.

Explorer panel with Genres.txt selected

Explorer panel with the THL I'm piecing together selected

Current state of my THL (having made sure to use 4 spaces and not Tab when editing in Notepad)