So... it looks like the following piece of code is the culprit:
urlencode($_zp_current_album->getFolder())
The urlencode method replaces the backslash between the parent and child folders with a $2F. As a quick fix, I used the str_ireplace function to add the backslash back in there:
str_ireplace("%2F", "/", rawurlencode($_zp_current_album->getFolder()))
Seems to work okay now.
Don