i am using
win-10 instead of
win-7 … so i cannot garner any screen-caps for you … but, when i used win-xp, i had similar setup to how you had configured your view to appear.
according to what i found on google … the option you want is in the down-menu of
'organize' tab in windows-explorer … listed as
"folder-and-search-options". this may also be located via control-panel
(folder-options / win-exp-options).
[ of course, at this time, you should already have your
'favorites' folder expanded within windows-explorer …
or else, the config will not take correctly. ]
once the
folder-options interface is in front of you … check the navigation-pane within the 'general' tab … make sure
"auto-expand to current folder" is checked.
if it is already checked
(enabled), uncheck
(disable) … make sure you hit "apply". open windows-explorer again … expand favorites … go back into interface and checked
(enabled) … make sure you hit "apply".
also … if i was you … i would take screen-caps before/after you revise the configs … is also your choice if you wish to create system-restore point before configuring the above options.