Browsing sub-folder returns full path

Ok, have tested this on two sites and I get the same problem.

I have enabled browse subfolders, Have created default subfolders all goes ok.
However, when I browse a sub-folder I get the absolute path to the folder rather than the relative .
ex.
configured path:
/files/userX/images /files/userX/pdf /files/userX/mp3

When I browse the subfolder I get the following, note it's the same for all paths configured.
/mounted-storage/home22a/sub001/xxxxxxxxx/xxxx/files/u52/images

If I select UP, ie, go up a folder the problem remains.

My guess is the problem is here somewhere:

function imce_relative_path($path, $root=NULL) {
  $abs = str_replace('\\', '/', realpath($path));
  $root = str_replace('\\', '/', ($root ? realpath($root) : $_SERVER['DOCUMENT_ROOT']));
  return strpos($abs, $root)===0 ? trim(substr($abs, strlen($root)), '/') : substr($abs, (($pos=strpos($abs, '/')) ? $pos : 0));
}

Hopefully this will be an easy fix?

regards,

Andy Ramblings