This no longer works which is disappointing, it was a good feature in iTunes. That sweep feature setting should be removed if it doesn't do anything, I wasted a good half an hour today trying to get it to work only to find out it doesn't do anything. I should have read to the bottom of the thread...
I just liked it because it would auto create the folder structure based on the song tags. Now I have to browse to the music folder, create the artist folder if it doesn't exist, then the album folder, then paste the songs which also might need to be renamed, then import.
I realise there were issues with it doubling songs when autoscan was enabled but wouldn't the solution be to just check if the destination folder was a folder/subfolder of a folder in the autoscan list and depending on the result do one of the following -
Folder in the autoscan list - Create the folder structure specified and move the songs to it, don't import them into the library, let the autoscan do it.
Folder not in the autoscan list (or autoscan not used) - Create the folder structure specified and move the songs to it. Add them to the library.
Either way, I think it should be fixed or removed so as not to confuse users.