Has anyone experienced this issue?

usync installed?

Yes I have Usync installed. It was not showing any changes after the renaming.

Try to disable the automatic import on startup in usync to see if that is what's renaming them. If that is the case the next step would be to look into why it's not picking up on the renames

Exactly what I was thinking

Yes I think the fact no changes appear in git indicates Usync is not picking up the folders have been renamed. In the end I just made new folders and moved the files which worked fine.

yeah it might be uSync doesn't pick up the changes to folders in doctpyes/datatypes - it doesn't actually sync the folders - we sync the things in the folders and that creates the folders - because the reality is they are not really 'folders' like other things are folders inside Umbraco. (they are more folder like then they use to be). but what we should do in uSync now is listen for the change and at least save all the things that are inside a folder. - will raise an issue for us to look at this

Thanks @Kevin Jump