Yes. But better still, you can recover them.
What I did was the following:
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Plugged the HDD into my computer.
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Looked up all files that were converted into ‘folders’ and made a note of them.
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Booted up Lubuntu from a bootable install cd; ran test environment (doesn’t require an install – see their pages for instructions).
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Browsed to the files that were converted into ‘folders’, which all looked normal.
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Copied these files to my internal hdd.
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Rebooted into Windows.
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Copied the files, which were now readable, back to the external HDD.
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Problem solved.
Or at least: files recovered. But I’m hoping my firmware rollback has also solved the problem