Sub-folders moved from a parent to the root lose properties. As you can see the properties indicate loss. Examination of the XML file after shows all items listed with "Object reference not set to an instance of an object" are missing from the connection or folder. i.e. 'username="blahblah" ' is not present anymore.
Inheritance is OFF on all connections/folders when dragging/dropping. If you save the XML file before moving the folder back you loose the property data. If you move the folder back under its original parent the properties are again present.
Windows 7 Pro