I just checked my Files and Folders table in the database and they look fine.  No duplicates or irregularities.  I'm not a vb guru, however I followed this path and not sure if I'm onto something...

The scheduled atuo file synchronize calls DotNetNuke.Services.FileSystem.SynchronizeFileSystem, DOTNETNUKE.

I looked in the SynchronizeFileSystem which calls FileSystemUtils.  FileSystemUtils seems to do the recursive part of the process.  Now here's my thought...at least for my install...File SystemUtils calls for example "Public Shared Function GetFolders".  I am assuming this is the dnn stored procedure.  Now...I explicitly declared an object_Qualifier of dnn_ to be a prefix to all of my dnn database objects, therefore my stored procedure is called dnn_GetFolders.  Is it possible the object qualifier is causing the scheduled synch not to resolve my stored procedure?  I know this is far fetched since the manual recursive synch works.  I don't know how to get the code behind the clicking of the file manager's synchronize button to see what it calls and if it's different than the DotNetNuke.Services.FileSystem.SynchronizeFileSystem, DOTNETNUKE.   I doubt it...therefore I'm clueless.

I did also check my logs and the schedule history seems fine...scheduler started and stoped ok, scheduler history says File System Synchronized, so everything seems to be running fine....

more suggestions?    : )

recursive flag is working - I cannot imaginewhy it wouldn't on your installation.

if you successfully run sync, this is not logged any where.

if folders still don't show up, check manually tables "Files" and "Folders" in your database for duplicates and orphaned entries.