In my private files, the creation of folders can be cancelled by clicking X on the dialog.

1. Login as a student and click on "Manage my private files..." in "My Private Files" block
2. Click 'Create folder' icon and verify that the create folder dialog is launched.
3. Click the X on the create folder dialog, then verify that the dialog closes and your changes have not been saved.
4. Click 'Create folder', enter a folder name and click 'Create'. Verify that the new folder is displayed in the file manager area.
5. Click on folder and drag and drop a file onto the file manager, which currently contains the text 'You can drag and drop files here to add them.'
6. Click Save changes/submit and verify that the files have been uploaded.