Add to New Folder does not work in 2016sp2

While editing a part, I select a few features (in this case a group of unabsorbed sketches), then right-click "Add to New Folder".

This should result in a folder containing the sketches, but in Solidworks 2016 SP2 it does not do anything.  Any approach to creating a folder in the feature tree does not work.

Any ideas on this?  It used to work in 2010.

SolidworksParts And Features