Generally, if ‘Demo’ is displayed (and possibly instruments cease to function after 15 minutes) you may be using the Kontakt Player.
Might be worth checking your shortcut. Although it isn’t beyond the realms of possibility that Kontakt has screwed up. It’s not perfect – not by a long way.
I read just now about a method of adding folders to the library list database in the Forum posts. Haven’t tried it myself yet, I’m not sure it’s much better than using the Files function. If you have time on your hands, that’s a way to occupy yourself for a while.
I create ‘Multi’ groups and save them to the Quick Load box, as well as individual instruments. Works well enough for me. I’ve already got too many tabs in the Library section.