Error
Mailbox doesn't allow inferior mailboxes.
Cause
This error is caused by a well-known bug in the IMAP implementation used by your email server. This typically affects IMAP servers known as DoveCot email servers.
This error occurs when MigrationWiz tries to create a folder at the Destination. Due to a defective implementation, the Destination IMAP server does not support the idea that folders may contain both messages and subfolders.
In other words, the Destination may allow you to have a folder A containing a subfolder B, or a folder A containing email items, but not both at the same time. So, if folder A contains email items, trying to create subfolder B results in a "Mailbox doesn't allow inferior mailboxes" error.
Resolution
One solution is to ensure that each folder with subfolders does not contain any email items. Review your Source mailbox's folder structure and compare it to the Destination's.
If any folder at the Source has subfolders, and the Destination folder does not yet have these subfolders but does contain email items, consider either manually creating the subfolders (although this may fail with the same error), or moving contained email items to a new location. Also, consider upgrading the IMAP system to see if a more recent version solves the problem.