What version is that? I don't have that "path prefix for tracks" box, which makes me think you are not on a recent version. Synching has been worked on and improved in the recent past, you should update and see if that fixes it.
Also, there's a setting for "delete files that are not on the auto-sync list..." at the top, and you should make sure that's checked.
A smile is happiness you'll find right under your nose.