diff --git a/server/routers/projects.py b/server/routers/projects.py
index d1c2b6c..68cf526 100644
--- a/server/routers/projects.py
+++ b/server/routers/projects.py
@@ -8,6 +8,7 @@ Uses project registry for path lookups instead of fixed generations/ directory.
 
 import re
 import shutil
+import sys
 from pathlib import Path
 
 from fastapi import APIRouter, HTTPException
@@ -131,7 +132,7 @@ async def list_projects():
 async def create_project(project: ProjectCreate):
     """Create a new project at the specified path."""
     _init_imports()
-    register_project, _, get_project_path, _, _ = _get_registry_functions()
+    register_project, _, get_project_path, list_registered_projects, _ = _get_registry_functions()
 
     name = validate_project_name(project.name)
     project_path = Path(project.path).resolve()
@@ -144,6 +145,22 @@ async def create_project(project: ProjectCreate):
             detail=f"Project '{name}' already exists at {existing}"
         )
 
+    # Check if path already registered under a different name
+    all_projects = list_registered_projects()
+    for existing_name, info in all_projects.items():
+        existing_path = Path(info["path"]).resolve()
+        # Case-insensitive comparison on Windows
+        if sys.platform == "win32":
+            paths_match = str(existing_path).lower() == str(project_path).lower()
+        else:
+            paths_match = existing_path == project_path
+
+        if paths_match:
+            raise HTTPException(
+                status_code=409,
+                detail=f"Path '{project_path}' is already registered as project '{existing_name}'"
+            )
+
     # Security: Check if path is in a blocked location
     from .filesystem import is_path_blocked
     if is_path_blocked(project_path):
diff --git a/ui/src/components/FolderBrowser.tsx b/ui/src/components/FolderBrowser.tsx
index fc97d4f..1e04e3a 100644
--- a/ui/src/components/FolderBrowser.tsx
+++ b/ui/src/components/FolderBrowser.tsx
@@ -304,6 +304,11 @@ export function FolderBrowser({ onSelect, onCancel, initialPath }: FolderBrowser
         <div className="mb-3 p-2 bg-[var(--color-neo-bg)] rounded border-2 border-[var(--color-neo-border)]">
           <div className="text-xs text-[#4a4a4a] mb-1">Selected path:</div>
           <div className="font-mono text-sm truncate text-[#1a1a1a]">{selectedPath || 'No folder selected'}</div>
+          {selectedPath && (
+            <div className="text-xs text-[var(--color-neo-text-secondary)] mt-2 italic">
+              This folder will contain all project files
+            </div>
+          )}
         </div>
 
         {/* Actions */}
diff --git a/ui/src/components/NewProjectModal.tsx b/ui/src/components/NewProjectModal.tsx
index b517fa5..e3aa755 100644
--- a/ui/src/components/NewProjectModal.tsx
+++ b/ui/src/components/NewProjectModal.tsx
@@ -75,9 +75,7 @@ export function NewProjectModal({
   }
 
   const handleFolderSelect = (path: string) => {
-    // Append project name to the selected path
-    const fullPath = path.endsWith('/') ? `${path}${projectName.trim()}` : `${path}/${projectName.trim()}`
-    setProjectPath(fullPath)
+    setProjectPath(path)  // Use selected path directly - no subfolder creation
     changeStep('method')
   }
 
@@ -218,7 +216,7 @@ export function NewProjectModal({
                   Select Project Location
                 </h2>
                 <p className="text-sm text-[#4a4a4a]">
-                  A folder named <span className="font-bold font-mono">{projectName}</span> will be created inside the selected directory
+                  Select the folder to use for project <span className="font-bold font-mono">{projectName}</span>. Create a new folder or choose an existing one.
                 </p>
               </div>
             </div>