I'm trying to hide empty 'Removable Disk' drives in my folder tree or listed folders/drives. I have unchecked 'empty disk drives' under Folder Tree > Contents, but they still are visible. See attached screen shot. Is there another option under preferences I am missing?
A fix for the folder tree part will be in the next update. The second set of drive letters which Windows 10 added, under the Desktop branch, will be filtered out of the tree entirely.
(If you want to hide empty drives in the file display, on the bottom right of your screenshot, the option for that is under Preferences / Folders / Virtual Folders, independent of the folder tree option.)
Is this a bug or a feature of Win 10? I assume a feature, but I can't imagine for what it's good for. It really irritates and if a feature let me think it's a bug, it's not a feature 
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I think it's a feature, to make drives you just plugged in quicker to access (because they've made navigation and the folder tree in File Explorer such a mess, they needed to compensate with stuff like that).
I'm sure it'll be removed in the next version of Windows, and they'll rename My Computer / Computer / My Computer / Computer / This PC yet again, and move things around in the tree again, never to any real benefit and just to confuse people and make it hard to write instructions that apply to more than one version of Windows.
Luckily, we can easily enough filter and move things in our version of the tree, once we realise it's needed.