The directories are inheriting permissions from the C: drive. After you create a directory, right-click and choose Sharing/Security, then click on the Security tab. If you do not see the user or group on the list with permission to use the directory, you will need to add it first and give it appropriate permissions. Then click on the Advanced button near the bottom of the screen. In the window that appears there will be two check boxes near the bottom. Uncheck the first one that indicates “Allow inheritable permissions…” and choose Copy at the prompt. Then check the second one to “Replace permission entries….”. At the prompt, choose Yes to continue and the permissions will be changed.
If you are going to use the Profiles directory for roaming profiles of other users, create users folders first. Then in the user profile, set the path to \ServerProfiles%USERNAME% which will keep the profiles separate. Make sure each user has Share permissions to the Profiles folder or to their individual folder within the Profiles folder or it will still fail.