This seems to be a bug in RadAsyncUpload. We will try to get it fixed for the next week's latest internal build. More information on how to obtain the latest internal build can be found here.
Meanwhile you can use the following workaround:
1) Add event handler for the FileUploaded
2) Once there, manually save the uploaded file to the target physical folder.
You can find example how to do it below:
sender, Telerik.Web.UI.FileUploadedEventArgs e)
var targetFolder = @
In addition, I have updated your telerik points for pointing us to this issue.
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