Thanks for the feedback.
Interestingly, the issue occurred with 1.7, then I uninstalled 1.7 using the Win10 Control Panel, and installed 1.8, so it should have been a clean install.
Also I set both the Sigil temp directory directly to a folder I own, and I set the MSDOS environment variable SIGIL_DEFAULT_TEMP_FOLDER to the same directory.
It seems to me something must have persisted across 1.7, the uninstall, and into 1.8 because when attempting to add existing files in 1.7 and 1.8 it always came up in the previous manuscript's folder.
I'll bang a round a bit more.
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