Two issues

One is that with the newest beta the hot keys are labeled very strangely. It says the name of the shortcut and then {//Win+1.

Please can you post a screenshot here. Also please tell me the Windows version you are using.

Two, I don't know if this is a bug or if this is a feature but if I have a folder that has all of my MS Office shortcuts and then create a hot key to open MS Word, unless I first go and look through that virtual folder I cannot use the hot key that is attached to anything inside that particular virtual folder.

This is not a bug. TLB don't load the virtual folders on startup. So it don't know about hotkeys there. There are two ways to solve the problem:
1) Move shortcuts into regular menu
2) Right-click the virtual folder Appearance->Load at startup