I've set it to <NotOnlyUnallocated/> since only unallocated was duplicating the icons I chose. The icons selected for the new folder were kept in "more..." aswell.

However I do not see why my first attempts got the menu stuck...
Could it be because:

1) the main menu does not allow more than 15 items? <- tested, the main menu does allow 15+
2) empty lines between the main menu and new folders have to be removed in “hildon.menu”?
3)what is the relevance of "bb_apps", does the name of the new *.directory matter?