Whenever we download asset from content DAM, the folder names inside that package will have/refer to "Title" of that folder not the "Name"( which appears in content DAM path /content/dam/name ). it is expected behavior/working not a BUG.
Created sub folders with different Title as highlighted below.
Sub folder with "Title"
Downloaded Asset package having Title i.e. "SubFolder2" as sub folder name not "subfolder2" as expected.