Ok, gonna answer this one myself.
There is a typo in the Release Notes for FMU. The end of the registry path
is supposed to have spaces in it: "File Migrate Options".
Unfortunately, it doesn't solve the problem. All that happens is that the
FMU stops reporting errors for files. It only reports errors for folders:
"*** Warning: Target sub folder '[...]' already exists. Contents being
preserved, duplicate files will be overwritten. - # 0x000000B7 Cannot create
a file when that file already exists."
/a