I have all my appz including iclone and its resources on drive D:
No problem whatsoever and I can easily clone my whole drive C os system with
Acronis anytime to keep it fast and clean with less registry junk. Incase drive C fails I can also easily use Acronis to rebuild drive C with a new harddrive and I'm good to go in 20 minutes no need to install everything again its safe in drive D. Better to keep the core drive isolated for failures.
Also putting everything in drive C makes computer operation slow. Indexing and stuff.
Iclone 6 and newer appz would benefit from a fast and clean system incase you eventually upgrade to IC6. SSD drive for os is even the most recommended.
Anyway the problem, the folder exist. Maybe you created it earlier. As long as it doesn't overwrite an actual texture file it should be ok. Folders are just containers doesn't matter if you overwrite them as long as you don't overwrite its contents.