Look you can either setup site alias as canonical, redirect or none.
I've seen the redirect working on some portals, but not on this one.
So clearly this is a bug.
Perhaps something was not updated during the upgrade or whatever.
And I would like to know what I can do about it.
And your not really helping by saying: open default.aspx in subfolder and adjust redirect path.
At least you could tell WHAT to adjust.
When someone links to an old url like www.website.com/oldurl/news/articles.aspx
I suspect the redirect should do www.website.com/newurl/news/articles/aspx
And certainly NOT www.website.com/newurl/oldurl/ whatever....
That is clearly a bug.