Hi NPZwar - sorry for the looong reply
I have the same problem in having multiple libraries for various reasons.
It is a real bug and started at 12.10.x.x
I joined this thread a while back and although turingtest2 (thank you) has been really helpful, it isn't a practical solution for many. The simple answer is it just needs a fix. I have experimented with all the itunes files & folders and the last working version is 12.9.3.3.
The problem is that the file "iTunes Library.itl" is not being updated. It might be a permissions thing but either way Apple needs to fix it. I had the thought that we are all on here complaining assuming Apple are reading this. It looks like they are not.
I made a call into the Apple help desk and they have been superb so far. They were oblivious to the problem. That may be because they all work on Macs and most people are happy with using the C drive. Either way the developers should be aware.
I let them log in to two different PCs and demonstrated the issue. I learnt something new. In 'upgrading' iTunes to 12.10.6.150 (the latest) I found that it sticks on the last folder you gave it in 12.9.3.3. I also showed them this forum. They are now investigating.
Great news though - As a workaround until they fix it you can download an older version v12.4.3 from https://support.apple.com/downloads/itunes
It is still available under "Download iTunes 12.4.3 for Windows (64-bit - for older video cards"
You might have to completely uninstall everything Apple as well as itunes as the app from Microsoft seems to dislike being removed by an older version.
They are trying to arrange an actual engineer to call me. Let's see what happens.