Hi,
I have run the code you have posted as a unit test against 1.3 and was not able to reproduce the issue.
Are you able to run the unit tests and sample provided successfully?
Did the code fail at some point during execution or did it never even create the first folder?
Also, have you considered executing more than one CMLCreate statement at a time. Batching them together means that they will all be created in a single transaction and you will only need to make one trip to the server, both saving you time.
Cheers,
Roy