Basically, with my phone hooked up via USB to my PC, I would drag a folders named "Soundgarden - Superunknown" and "Soundgarden - Badmotorfinger" to the "Music" folder on my SD card. Later, I would notice that the OS or one of the media players automatically changed the two individual folders from:
mnt
SDcard
Music
Soundgarden - Badmotorfinger
Soundgarden - Superunknown
...to:
mnt
SDcard
Music
Soundgarden
Badmotorfinger
Superunknown
I never told it to do such a thing, but I liked the behavior. Since the feature has broken somehow, I have checked in the settings for PowerAmp, the HTC music player, and just the general Android Settings app and I'm not seeing anything related to this. I mean there are things like scanners that you can set where to (or not to) look for music, but I didn't see anything where it gives you the option of auto-organizing your music based on the tags.
And since I don't remember if this first occurred before or after I put PowerAmp on there, I don't know if it is something Android or the HTC music player was doing or PowerAmp was doing. I'm pretty sure I had PowerAmp on there almost from the beginning though, which complicates things. I've tried to Google this, but I can't come up with a relevant search string.