Now I can neither extract files to nor delete the folder because it is "corrupted and unreadable". This is the first time I have had such a problem come up and it is rather disturbing.

All the best! Read: Error 0x80070570, The file or directory is corrupted and unreadable.

Is it supposed to do that, or can it just fix errors and not delete things? Does it actually delete corrupt files, or does it try to fix them and then deletes them if they can't be fixed?