An empty chunk is created first (while the dragged subfolders are being processed) and then after you choose the "Subfolders -> Chunks" option it is not removed.
So the end result is:
-Empty Chunk
-Subfolder 1 chunk
-Subfolder 2 chunk
etc
I believe it should instead be:
-Subfolder 1 chunk
-Subfolder 2 chunk
Small issue but i thought it made sense to report it.