This problem happens when recording audio....not MIDI data. I've checked under MIDI, and there is no setting there for Take Folders. Under RECORDING, there is an overlapping Recordings drop down menu that WAS set to "merge only in Cycle record", but I've changed it to Create take folders. Not sure who this would affect AUDIO, because even this dialogue was under a MIDI menu.
For the most part, Take recording works. It's only on the occasional track that it does this strange overlaying of takes.
Thanks,