I know this is an old thread, but the problem still exists.
It seems that the error is not related to another process in which the folder is locked. I believe InstallShield is struggling with itself, trying to rename the folder in which IT still has files. Therefore, many traditional approaches, such as closing the conductor and even rebooting, sometimes do not work.
I found a fairly simple solution - delete the \ Express folder tree from the installation project folder before doing the build. InstallShield simply recreates it, and everything is in order, because renaming is not required.
source share