Yes, a migration function would indeed be needed. I don't see how this is a bug though, we don't use the bug tracker as a todo list, only to report things that were intended to work but are somehow broken.
Ok, will reopen the bug for a while to see if any developers likes to take this up, but this fits more on our todo list:
If we just move the folder this way, it will break the configuration for users who use both the 2.63 release and newer test builds. I think this migration should be done as part of the version switch to 2.64, in the "Copy Previous Settings" operator, there settings are being copied anyway.
Also this patch seems to contain a bunch of other code, could keep that separated?