Ho, oh...
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...but this folder does exist for sure...
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Mhhh... Please forgive me for asking, but are you totally sure about this? Or better, which folder are you sure about? I\DVD or I\DVD\VIDEO_TS? or both?
In my tests, if the folder pointed out in the -d command exists, the error about missing destination folder should be NOT produced...
What about (in your testing environment) trying with a destination folder which does not end with "VIDEO_TS" ?
Note that the behaviour of MuxMan about creating automatically the VIDEO_TS subfolder has changed in the release 0.16.7, and in particular it is not the same to launch manually MuxMan through its GUI or via C/L. So the need to explicitly check about the existance of the destination folder before launching the authoring session, introduced in BM 1.4 can not be avoided...
The fix of using BM 1.3 as a temporary solution is very good, indeed (no more log file about the authoring session, however)...