This is a browser-specific behavior, which depends on a security setting in Internet Explorer ("Include local directory path when uploading files to a server"). Providing the full file path is regarded as a security vulnerability and is by default disabled. The Kendo UI Upload itself strips this information and it is not provided in the widget event arguments. However, the full path will be sent to the server when uploading synchronously, as this process is not controlled by the Upload widget.
Join us on our journey to create the world's most complete HTML 5 UI Framework - download Kendo UI