I tested it and it worked fine. I created a test folder and uploaded a test file, which you can delete it yourself.
Please note when you log on as a sub-user, the default folder is the sub-user's My Storage root folder. In most cases, you don't want to allocate storage space to sub-users. Thus a sub-user cannot create folders or upload files in his root folder. The group owner can create folders in his/her own account, then share folders with sub-users. He can share different folders with different users and set different permissions. A sub-user can only see the folder(s) shared with him/her. The shared folders can be accessed in the special share location:
\DriveHQShare\GroupOwnerUsername\SHARENAME
You can set a different default folder with two methods as described in this support message:
https://www.drivehq.com/bbs/getmsg.aspx/bbsID110/msg_id256699004/ref_id0/page1#0
In your case, you set the default folder to "\DriveHQShare". Please note the SFTP protocol does not truly support default folder, so the "default folder" becomes the root folder, you cannot go to the parent folder of the default folder. (The regular FTP protocol supports default folder. The default folder is the initial folder right after you log on. You can navigate to the parent folder of the default folder).
When your sub-user logs on via SFTP, the default folder is "\DriveHQShare\", but is displayed as "\". A shared folder can be accessed at:
\GroupOwnerUSERNAME\SHARE_NAME
Note your sub-user cannot create a folder/file in the root "\" ( It is really "\DriveHQShare").
The folder "\DriveHQShare" is a virtual folder that contains usernames who shared a folder(s) with you.
You also cannot create a folder/file in "\USERNAME" (it is really "\DriveHQShare\USERNAME").
"\DriveHQShare\USERNAME" is a virtual folder containing ShareNames the USERNAME shared with you.
You can create files/folders in "\USERNAME\SHARENAME" if it was shared with "Full Access" permission (or "Upload", "Add & Edit" permissions)