Moderators - Can you please not delete this post as off topic mobile as this problem also occurs in my Mac Mail email client. It's just easier to demonstrate here.
I'm using an iPhone 4 against an Exim 4.2.52 using IMAP. I'm unable to delete messages in this particular account - see the error message below. After getting this dialog the messages disappears from the current view until I switch out and back to it when it reappears.
The other behavior I see is that despite me picking an IMAP folder for Drafts, Sent and Deleted messages, after I save those settings and go back to that screen the settings have reverted to the local iPhone folders.