The problem isn’t the Hard Drives … the problem is the WDTV Media Player and it’s firmware.
If you google search the problem there are a lots of posts about it …and the WD Media Players are notorious for doing this.
Doesn’t seem to matter what Model WDTV or file type.
Personally, i would recommend getting rid of the old discontinued wdtv and buying a new media player that does not do this.
I use a Raspberry Pi 3 (running Kodi) and a Amlogic S905X Android Media Player … and they have never corrupted or converted files to folders.
examples: WDTV Live - random avi files being converted to folders - #11 by bugmenotpls
https://silkenhut.com/wdtv-live-turns-files-folders-recover/