Currently calibre forces you to choose an empty folder to create a new library. This behavior has been around for quite a while.
Edit:
Quote:
Release: 0.7.21 [01 Oct, 2010]
Bug Fixes
Welcome wizard: Prevent the user from choosing a non empty folder as her calibre library
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Interesting that this was in place 8 months before the user mentioned in the link deleted his desktop. With the current remove library change any other bombs waiting to go off are averted.