While your program installs on any other drive you select, the active game folder is usually on your main drive. Nothing is wrong that is how it is supposed to be.
Deleting the game folder from drive C only results in the generation of a new folder on your next start up, as you have found out. That is what it is designed to do. If it was not recognizing your program files, i.e. the files that run the game which you have installed on drive E, then it would not have generated your game folder in its proper place—the game folder located in your "My Documents" folder on your main drive which for you, according to what you have said, is drive C.
Basically you are asking for help because your game is running as it should
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