1. Go into a course in which you have the teacher role.
2. Turn editing on.
3. Attempt to drag and drop a non-zipped folder from your computer into your Moodle course
4. I receive the following error: An error occurred whilst communicating with the server

We just upgraded our site to version 2.6.3. This is occurring in versions 2.6.3 and 2.7 (2.7 using demo.moodle.org)