" FORCE users to create separate project folder"
that’s the thread title you need to post mate. I agree with you
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I might just create that now as a feature request. 
Sometimes workflow enforcement is good. Certainly better than losing data.
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Better to be safe than sorry lol
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Yeah… Cant recreate the dual audio folder deletion… I still swear though… I swear.
I mean, there are other variables… who knows… the project was open for 10+ hours, could that change something? I’m not sure. Could it be a memory thing. I don’t know. A combination of Save New Versions and backup? perhaps a closing of Cubase and re-opening. Active project on one hard-drive, backup on another…
I’ve tried a bunch of things including most the above… Can’t recreate the dual deletion. Could be something to do with how ‘Trash’ in the pool is handled that I’m not aware of.
There is potential that someone could lose both though if they, did the thing we’ve repro’d here… and then and then did another final backup sometime down the road and then deleted the version that had stuff in the audio folder. That’s not what I did though.
not sure, spookyness somewhere or I was mistaken at what I was looking at. Maybe I was looking at the audio folder from a location box that doesn’t show audio files or something. who knows. still though… I did drag things in from TI backup… and had never done a ‘Remove Unused Files’ + ‘Empty Trash’. at least not that I remember…
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Added to the issues list, number 33.
In the meanwhile, please do not check the Keep Current Project Active option when doing a Project Backup.
The scope of the Backup Project command is to backup the project, and not to save a version of the unsaved current project, which sounds like what the OP was expecting.
Possibly it would be a good idea to note in the documentation that using Backup Project will also save the origin project.
A better workflow for this would be to save the project before using the backup command, or to use Save New Version instead.