Ah-HAH! I think I got it
This bug occurs when I use the spacebar to highlight some files/folders (occurs when highlighting both local and remote files). The weird thing is that it doesn't occur when I highlight certain types of files, such as text (.TXT) files.
Try doing this and see if it happens:
1.) Run FlashFXP and open a connection
2.) highlight a file other than .TXT (ie.: PHP, CSS, HTML...)
3.) make the local browser active
4.) select a file/folder in the remote browser (without explicitly making it active first) using the double-click button on the mouse.