Translation dialog cannot link to existing manually created folders

The improved behavior of CMS7-9144 brings up a usability issue with the translation dialog. The use case is:

I have a Dutch document tree and an English document tree, which are, to a large extent, linked to be translations of each other. Now, in the Dutch content, author A creates a new subfolder F in some existing folder and in folder F, he creates a document D.
When done, A would like to translate the document to English, using the translation dialog. A would like to put the translated English document into the existing subfolder FE in the English document tree, so he fills in 'FE' for the target folder field in the translation dialog, and 'DE' as the name of the translated English document.

Before the fix for CMS7-9144, this would trigger the CMS to create a SNS folder FE in the English document tree. After the fix, the dialog displays an error that "FE" already exists.

Now, A has to jump through a series of hoops: A has to realize that what he should do instead is

1) log out
2) log in as administrator (or have an administrator come and help him)
3) locate folder FE
4) use the translation folder workflow action to mark FE as a translation of F
5) go back to D and now use the translation dialog to create DE inside FE.

To me, this means that the translation dialog is broken in two ways:
1) It is strange that an author can create folders and documents, and can translate documents but not folders.
2) When a user runs into the problem described above, it is (way) too difficult for him to solve the problem.

Instead of the current behavior (which is a slight improvement over the old behavior), I suggest to investigate

1) if it is possible to let the translation dialog automatically create the translation links for existing target folders, and
2) if it is desirable to keep the translation folder workflow action at administrator permission level.