Okay okay, so I was a bit sensationalist there.  It's not "broken".  

What I mean is, whenever I download a file from my browser or otherwise paste a file onto my desktop, I have Fences set up to automatically move all those new files to a certain "temporary" fence so I always know exactly where to look for newly added files.  This works fine normally but in the case with 7-zip "Extract here", it results in this weird bug.  To me since 7-zip is simply adding files to the desktop just like any other app, I think it should be treated the same.  I'll have to see if I can post a screenshot of it here so you can see what I mean..

I have the same problem, but with WinRAR. Every time I extract something I get the same symptom...

Yes, I think so.  When I right click on the "temp" fence:

Organize->Place all new items in this folder by default

But it no worky with 7-zip !  

Weird, because for me both of those options drop the files outside of all fences.  But at least it can be reproduced in one case.  Does this mean it can/will be fixed in a later version of Fences?

I've seen this behavior with Windows' built in compressed folders utility, so it looks like something to do with files being extracted from a compressed state to the desktop.

If I had to guess, Fences is trying to move the file as soon as it hits the desktop, but since the file probably isn't complete it is either locked or the next time a chunk of data is written to the file it *pops* back to the desktop. On my wife's laptop I could actually see the file go from the desktop, into the default fence and then back to the desktop. I wasn't using Extract to X though, I was just dragging files from a compressed zip onto the desktop.

Just my .02,

We actually discussed this today, and it looks like the mechanism to detect new icons and icon moves on the desktop is going to be overhauled to work better.  Expect some Fences updates in the near future.

Any update on when this will be fixed? I have Fences pro and I'm having the same problem. Extracting or compressing a file(s) will put the file on my desktop instead of where I have told Fences Pro to put it. Funny thing is when i click on refresh it goes to the correct location.

Okay, I can't remember, have we had an update for Fences yet?  I'm still seeing this problem with "Extract to (folder)".