Description:
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I can't find a better summary...
The issue looks complex to me.

By using the rename function, you can create a path whose total length is superior to 255 (?), wich "appears" to be some limit on NTFS.

Once you renamed your dir, the files under can't be deleted nor renamed using explorer...
And php is_file stops working

I'm too dumb to understand the windows ntfs spec...

So, the issue is:
"rename() allows you to create path longer than a limit that triggers problems..."

Reproduce code:
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// Create a directory

@mkdir('c:/test');

// Create a file in that directory

$path='c:/test/whatever_the_name_of_this_file';
$fp=@fopen($path, 'wb+');
@fclose($fp);

// Rename that directory in order that the file full path will be long enough to trigger the bug

$destination=str_pad('c:/test', 250, '0');
rename('c:/test', $destination);



Expected result:
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(i) If the whole is incorrect, I would like to have an error from the rename function, and my dir shouldn't be renamed.
(ii) If this is correct, then is_file (and probably other functions) should work correctly on this file

Actual result:
--------------
(i) something is broken in windows (duh!), as you can't rename or delete the file
(ii) php functions like is_file, don't work on that file