Please check if Settings / Advanced / Use thumbnail for folder icon is ON. If it's off jAlbum will not use folder thumbnail, instead will use the plain folder icon. In the latest update I have removed this from the button, as showing half of an icon isn't spectacular.
I'm stuck. Your album doesn't contain settings, and I can't reproduce the same error. I'm preparing a new release which will have control over parent level jumps. If you set that to "0" it will not trigger this error.
In the future, sbesson, please always include the lifeboat file in your album. This is an important tool for debugging, and saves a lot of time, and a lot of questions ("Did you set this? Did you set that?").