I think I just came across another weird issue.
I excluded approximately 200 songs from transfer in MB, then ran a wifi sync. Instead of deleting the individual songs, wifi sync deleted the whole artist folder from the phone.
Then, upon the next wifi sync, it copied all the songs which were meant to be not deleted in the last sync.
Maybe I was deleting too many songs at a time? I'll try deleting fewer songs next time and see what happens.
Steven, I'm really sorry to keep bothering you with more and more issues.
I did a little test regarding the one above:
Note: I have a custom tag called 'Transfer' to manage the songs I'd like to transfer to my phone.
In my library, artist Calum Scott have 2 songs of which the 'Transfer' tag are set to 'Yes', meaning those 2 songs are set to sync onto my phone.
I changed 'Transfer' the tag of one of the song to empty value, so that one would be deleted from my phone, and the other would remain on it.
Below is the screenshot of the preview prior to syncing. Wifi app correctly discovers the song that are meant to be deleted.

And here is the confirmation for deleting that particular song, after tapping 'SYNC NOW'.

And below is the debug error log of the said syncing.
As shown, it first deleted the song, then at the end it deleted the artist folder containing one song that were meant to remain on the phone.
2019-05-06: MHA-L29; 9; 0.7.5
17:47:58: ping: socket ok=/10.165.1.126
17:47:58: ping: hello=MusicBeeWifiSyncServer/1.0
17:47:58: ping: matched=/10.165.1.126,status=OK
17:48:06: startSync: preview=true,iteration=0
17:48:06: command: action=SYNC_START
17:48:06: tryStart: connecting /10.165.1.126, attempt=0
17:48:06: tryStart: connected
17:48:06: tryStart: hello=true,fromMB=true,custfiles=false,preview=true,dev=MHA-L29,2
17:48:06: syncDevice: root=/storage/1AA1-02B9,ignoreErrors=false,playlists=false,ratings=true,playcount=true
17:48:06: syncDevice: command=SendStats
17:48:07: syncDevice: command=ShowResults
17:48:07: syncDevice: command=GetFiles
17:48:07: getFiles: Get: Music/, inc=true
17:48:08: syncDevice: command=GetFiles
17:48:08: getFiles: Get: Podcasts/, inc=true
17:48:08: syncDevice: command=GetFiles
17:48:08: getFiles: Get: Music/Playlists/, inc=false
17:48:08: syncDevice: command=ShowPreviewResults
17:48:08: syncDevice: exit
17:49:05: startSync: preview=false,iteration=1
17:49:05: command: action=SYNC_START
17:49:05: tryStart: connecting /10.165.1.126, attempt=0
17:49:05: tryStart: connected
17:49:05: tryStart: hello=true,fromMB=true,custfiles=false,preview=false,dev=MHA-L29,2
17:49:05: syncDevice: root=/storage/1AA1-02B9,ignoreErrors=false,playlists=false,ratings=true,playcount=true
17:49:05: syncDevice: command=SendStats
17:49:06: syncDevice: command=ShowResults
17:49:06: syncDevice: command=GetFiles
17:49:06: getFiles: Get: Music/Playlists/, inc=false
17:49:06: syncDevice: command=ShowDeleteConfirmation
17:49:36: syncDevice: command=DeleteFiles
17:49:36: deleteFiles: Delete: Music/Calum Scott/Only Human/06 Stop Myself (Only Human).mp3
17:49:37: syncDevice: command=ReceiveFile
17:49:37: receiveFile: Receive: Music/Playlists/Recently Favorited.m3u8
17:49:37: syncDevice: command=ReceiveFile
17:49:37: receiveFile: Receive: Music/Playlists/Least Recently Played ★4's.m3u8
17:49:37: syncDevice: command=ReceiveFile
17:49:37: receiveFile: Receive: Music/Playlists/For Shuffle.m3u8
17:49:37: syncDevice: command=ReceiveFile
17:49:37: receiveFile: Receive: Music/Playlists/5 Stars.m3u8
17:49:37: syncDevice: command=ReceiveFile
17:49:37: receiveFile: Receive: Music/Playlists/4 Stars.m3u8
17:49:37: syncDevice: command=DeleteFolders
17:49:37: deleteFolder: Delete: Music/Calum Scott/
17:49:38: syncDevice: command=Exit
17:49:38: exitSync: fails=0
17:49:39: syncDevice: exit
Below is the screenshot of the preview of the next syncing, where the song that was not supposed to be deleted are being copied.

Btw, Wifi syncing seems to be working fine as long as the PC stays on 10.165.1.126.
Any other IP would cause 'Server not found' to reappear.