From Microsoft Knowledge Base: the Setup program creates mscreate.dir (a 0-byte hidden file) in each folder that Setup creates to indicate that the folder was created by Setup. When you run Setup in maintenance mode and remove a component or click Remove All, Setup uses this file to determine whether an empty folder can be removed. If an empty folder does not contain this file, when you run Setup in maintenance mode Setup will not remove this folder.
For example, if you create the folder My Files in the Microsoft Office folder, when you run Microsoft Office Setup in maintenance mode and click Remove All, the My Files folder is not removed by Setup, even if it is empty when you run Setup.
- Neale Morison