Solved it by creating and executing a batch file in the "On error/Catch error" part when creating/deleting/renaming/copying/moving files and folders with cases where the % character is causing problems.
Just in case anyone runs into similar issues in future.
This thing has been bugging me for some time now, returning depending upon what I wanted, but never solved completely. There was no way I could find to solve it using MEP itself, thus I've resorted to what is so far a full proof solution. It needs an external tool though unfortunately.
The only time I see this is when using the Repeat with Folder Folders Only command, to date I've not had similar problems using Repeat with Folder Files Only.
It's definetely MEP causing the problems, see screenshot taken "MEP_RepeatFolderHoggingFolders.JPG". (Sorry, don't know how to insert the image)
Anyhow, fortunately the tool I made the screenshot of is a free tool, with command line options. Once installed its program folder can be simply copied from PC to PC, and it will work properly. Thus portable. The only disadvange is that the right click menu "Unlocker" option doesn't show, but for the moment I don't care.
Using it just before I move the folder unlocks the by MEP hogged folder and moves it as I want. The tool itself is called "Unlocker 1.9.2", and freely downloadable from the internet.
I've checked for ill side effects, and unwanted problems using MEP further after using unlocker, but to date none were experienced.