I'm pretty confident that "target vm folder" actually has nothing to do with the folder on the datastore that you are going to restore the virtual machine to - it is probably referring to the inventory folder in the vCenter server. I think it is a poor choice of wording on Veeam's part, and should probably read something like "target vCenter Inventory folder" or something like that. I was just hoping that a Veeam expert would confirm this. In my case since I am not using vCenter, this folder is not selectable so is irrelevant. I suspect that when I restore, Veeam will create a folder on the datastore with the same name as the name I give the restored virtual machine, in which case I shouldn't have a problem since the virtual machine that I originally backed up will be in a different folder than the one I restore.