Using 'One file per directory' to get one file per directory works fine provided the output lines are in directory order... but if they are not, each directory's file contains the output of only the last group of files in that directory. It seems upon each directory change mp3tag is opening that output file as empty, erasing any existing content, whereas each time except the first it should be opening for appending.
A workaround is to surround the export config file content with
$loop(%_folderpath%)
$loopend()