"these folders seemed to keep all the files in them..."
A new game should have 22 files, after going to either Verdistis or the Dark Forest it should have 27, after going to both it should have 32, after getting to the wastelands it should have 37, and after getting to the Black Ring dungeon it should have 42.
"what was weird was that there WERE still the regular save folders in their previous names except the only file they have in them is 'inv.b0'"
Since the hotfix, the game saves to a temporary folder first before overwriting a save (in case there are problems during the save), but does not use the '(1).tmp' notation. I 'watched' the process once with
FileMon, and IIRC it either renamed or created a folder with a .tmp extension to the original name.
"the folders are now read-only"
If the files are marked as read-only, Divinity will crash trying to open them when loading, but I'm not sure if the folder will cause problems.