Suppose we have our usernames in the form firstname.lastname and we have a user “abcdef.ghijkl-mnopqrs”. This username is 21 characters long including the intermediate period. When we create the account, Windows says their pre-Windows 2000 name will be just the first 20 characters. We might then choose to edit the pre-Windows 2000 name to be “abcdef.ghijkl”. But we don’t change the long version of the name which becomes the UPN when added to the UPN suffix (i.e. abcdef.ghijkl-mnopqrs@mydomain.xyz). Windows creates an account in Active Directory. If we copied the account from an existing one, Windows might also automatically create a home directory in the same path as the original account which might be something like \someserverhomesabcdef.ghijkl
This is OK if you are creating one user at a time and copying them. However if you are creating these users from a script, or creating the home directories separately and setting permissions manually, you need to be aware that references to %username% do refer to the pre-Windows 2000 form of the name (the 20 character one). Folder redirection policy will fail if the policy uses the %username% variable to refer to a home folder whose name does not match the pre-Windows 2000 name.