It seems that the option only affects files in sub-folders, not folders.
It's easy to rename them if you go into the folder and select them. If your real example is more complex (e.g. lots of Concerto folders spread around many places), then I recommend using the Find tool or Flat View mode to get a list of all of the folders you want to rename, then select them and rename them (without using the "rename files in sub-folder" option at all).