Hi,

If a folder has a file "a.b", I can't create a folder named "a.b" in the
same parent folder.

Here is how to recreate that in an "emacs -Q" session:

> emacs -Q &
C-x C-w C-a C-k ~/.emacs.d/test.el
M-: (make-directory "~/.emacs.d/test.el")

Doing so gave me the below error.

Unix allows have a file and a directory with the same name in the same
parent folder. I believe that the distinction between an existing file or
an existing directory is not being made here.

Debugger info:
Debugger entered--Lisp error: (file-already-exists "File exists"
"/home/kmodi/.emacs.d/test.el/")
  make-directory-internal("/home/kmodi/.emacs.d/test.el/")
  make-directory("~/.emacs.d/test.el/")
  eval((make-directory "~/.emacs.d/test.el/") nil)
  eval-expression((make-directory "~/.emacs.d/test.el/") nil)
  funcall-interactively(eval-expression (make-directory
"~/.emacs.d/test.el/") nil)
  call-interactively(eval-expression nil nil)
  command-execute(eval-expression)

In GNU Emacs 25.0.50.2 (x86_64-unknown-linux-gnu, GTK+ Version 2.10.4)
 of 2015-02-23 on ...
Repository revision: ed7005c0e974a43c9b63d6f5d8ef6bd4099ba449
Windowing system distributor `The X.Org Foundation', version 11.0.60900000
System Description: Red Hat Enterprise Linux Client release 5.10 (Tikanga)

Configured using:
 `configure --prefix=/home/kmodi/usr_local/apps/emacs/25.0
 CPPFLAGS=-fgnu89-inline'

Configured features:
XPM JPEG TIFF GIF PNG RSVG IMAGEMAGICK SOUND GPM DBUS GCONF GSETTINGS
NOTIFY ACL LIBSELINUX GNUTLS LIBXML2 FREETYPE LIBOTF XFT ZLIB

Important settings:
  value of $LANG: en_US.UTF-8
  locale-coding-system: utf-8-unix

Major mode: Debugger

Minor modes in effect:
  diff-auto-refine-mode: t
  tooltip-mode: t
  global-eldoc-mode: t
  electric-indent-mode: t
  mouse-wheel-mode: t
  tool-bar-mode: t
  menu-bar-mode: t
  file-name-shadow-mode: t
  global-font-lock-mode: t
  font-lock-mode: t
  blink-cursor-mode: t
  auto-composition-mode: t
  auto-encryption-mode: t
  auto-compression-mode: t
  buffer-read-only: t
  line-number-mode: t

Recent messages:
For information about GNU Emacs and the GNU system, type C-h C-a.
Saving file /home/kmodi/.emacs.d/test.el...
Wrote /home/kmodi/.emacs.d/test.el

Load-path shadows:
None found.

Features:
(shadow sort gnus-util mail-extr emacsbug message dired format-spec
rfc822 mml mml-sec mm-decode mm-bodies mm-encode mail-parse rfc2231
mailabbrev gmm-utils mailheader sendmail rfc2047 rfc2045 ietf-drums
mm-util help-fns mail-prsvr mail-utils help-mode debug vc-git diff-mode
easymenu easy-mmode time-date tooltip eldoc electric uniquify ediff-hook
vc-hooks lisp-float-type mwheel x-win x-dnd tool-bar dnd fontset image
regexp-opt fringe tabulated-list newcomment elisp-mode lisp-mode
prog-mode register page menu-bar rfn-eshadow timer select scroll-bar
mouse jit-lock font-lock syntax facemenu font-core frame cham georgian
utf-8-lang misc-lang vietnamese tibetan thai tai-viet lao korean
japanese hebrew greek romanian slovak czech european ethiopic indian
cyrillic chinese case-table epa-hook jka-cmpr-hook help simple abbrev
minibuffer cl-preloaded nadvice loaddefs button faces cus-face macroexp
files text-properties overlay sha1 md5 base64 format env code-pages mule
custom widget hashtable-print-readable backquote make-network-process
dbusbind gfilenotify dynamic-setting system-font-setting
font-render-setting move-toolbar gtk x-toolkit x multi-tty emacs)

Memory information:
((conses 16 81214 6429)
 (symbols 48 18676 0)
 (miscs 40 65 124)
 (strings 32 13094 4483)
 (string-bytes 1 366132)
 (vectors 16 10734)
 (vector-slots 8 399013 6373)
 (floats 8 80 106)
 (intervals 56 209 19)
 (buffers 976 14)
 (heap 1024 234303 1302))