Update 7/14/11: When contacting Microsoft Customer Support to obtain the Interim Update, you can reference KB 2581545 (please note that the article will be available at a later date on support.microsoft.com).
7/27/2011: Exchange 2010 SP1 RU4 has been re-released. See Announcing the re-release of Exchange 2010 SP1 Rollup 4. We also provide more details on what actually happened and what improvements we're making to prevent this in the future, in An Update on Exchange Server 2010 SP1 Rollup Update 4.

We have discovered an issue impacting some customers who have installed Exchange 2010 SP1 RU4 into their Exchange environment and as a result have removed SP1 RU4 from Download Center and recommend customers do not proceed with any planned deployments of SP1 RU4.

A small number of customers have reported when the Outlook client is used to move or copy a folder that subfolders and content for the moved folder are deleted. After investigation we have determined that the folder and item contents do not appear in the destination folder as expected but may be recovered from the Recoverable Items folder (what was previously known as Dumpster in older versions of Exchange) from the original folder. This behavior occurs due to a customer requested change in SP1 RU4 which allowed deleted Public Folders to be recovered. Outlook and Exchange are not correctly processing the folder move and copy operations causing the folder contents to appear to be deleted. OWA and Exchange Web Services clients are not affected by this change and process the folder move or copy actions correctly.

We will be providing a fix in Exchange 2010 SP1 RU5, scheduled for release in August, which prevents the content loss in the target location during the move/copy process. In addition, we are also working with the Outlook development team to examine their code for proper behavior and identify if a fix is necessary from the client. If you have already deployed SP1 RU4, we recommend obtaining an Interim Update that resolves this issue.

If you are a customer seeing this issue or would like to receive the Interim Update, please contact Microsoft Customer Support.  When contacting Microsoft Customer Support, you can reference KB 2581545 (please note that this article will be available at a later date on support.microsoft.com).  When installing the Interim Update, you need to install this on all Client Access and Mailbox servers that have SP1 RU4 installed.

We are commencing an internal review of our processes to determine how we can best prevent issues such as this one arising in future.

Once again, on behalf of the Exchange Product Group, I want to thank you for the patience you continue to show us while we work through these issues. We deeply regret the impact that this issue has had on you, our customers, and as always, we continue to identify ways to better serve your needs through our regular servicing releases.

Kevin Allison
General Manager, Exchange Customer Experience