This page was born out of frustration. My Windows Explorer Favorites folder died. It was listed in WinExplorer but dragging items to it failed (the nasty red not allowed icon appeared ) as did right clicking to restore the default folders. The only advice I found online was to run sfc /scannow – it failed to fix the problem (it said everything was A-OK). I also found some reg keys to fix it. They also failed to make my favorites folder work again.
The "My Downloads" folder was also missing.
I found a fix for the missing My Downloads folder – create one called My Downloads at C:Users. It worked – the folder picked up the download arrow when i refreshed the screen. I knew from research that the Favorites folder was called Links (as in Favorite Links) so I made a new folder named My Links in the same location and voilà! The Favorites folder in Windows Explorer worked once again.
After I restored the folders I found instructions that said running the command shell:links (type it in Start menu, Start search and press Enter) will recreate the missing folder. I can't say if it works since I already fixed my problem.