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A couple of points:
1. Change your template to:
{#genre:re(\.,/)}/{title} - {authors}
I'm assuming from your screenshot you have your genre set up as a hierarchical column. The above template converts the period (hierarchy separator character) into a slash (directory separator character). Note that this works even on Windows, where the directory separator is a backslash.
2. Did you use Save to Disk, or Save to Disk in a Single Directory? Save to Disk is what you want. The Single Directory option will save all books to the root of the folder you choose.
Hopefully these will fix the problem.
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