Means that you created the s3 side with some other tool and expected s3sync to pull it back down to local. But since the folder nodes were not stored by s3sync, it is horking now.
"$folder$" is a give away.. s3sync doesn't build nodes like that.
You can try the option to force local folder creation and see if that helps. You might also try including your command line and the -d output here.
