If you drag a file over Windows Live Messenger‘s My Sharing Folders shell name space item, it would immediately interrupt dragging with an error message box, even if you never planned to drop onto this folder:

This should definitely be rather implemented a different way. If you ever tried to drag something using slow PC touchpad, you probably have an idea of how annoying such an interruption could be.

Windows Live Messenger was pre-installed. To disable shared folders feature, I wanted to find a proper setting in options, but it did not appear to be easy enough: Help button, Show the menu bar, Tools, Options, Sharing Folders on the left, oops! it was not helpful.

Going another way of finding DLL that hosts the shell extension revealed file named: C:\Program Files\Windows Live\Messenger\fsshext.8.5.1302.1018.dll. Once unregistered, the folder went away from the shell (process restart needed, typically logoff/logon):

C:\>regsvr32 /u "C:\Program Files\Windows Live\Messenger\fsshext.8.5.1302.1018.dll"