This behavior is not so much a bug, as it is a licence limitation. You are advised to not name any modules build with the module builder with the same name of a Sitefinity build in module - be it Images, Libraries, Blogs, Events, etc. The same goes for placing folders on your site's root with the before mentioned namings.
This will cause our implementation to conflict the two elements and malfunction. This cannot be fixed the way a bug can. Please refrain from such naming in the future.
Ivan D. Dimitrov
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