I found this from a FAQ about Xcopy's limitations:
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Create a new folder within the root directory ("C:\"

called "Test".
Go into this folder.
Create a new folder within "Test" called "Source". Go into this folder.
Create a folder within "Source" called "Microsoft is #1".
Create a folder within "Source" called "Microsoft is #2".
Create a folder within "Source" called "Microsoft is #3".
Open a DOS prompt box.
Type "CD \Test\Source" and hit {Enter}.
Type "DIR" and hit {Enter}. You will see the three folders you just
created, and their short file name aliases. Note that the short file
name for "Microsoft is #1" is "MICROS~1", the alias for "Microsoft is
#2" is "MICROS~2", and the alias for "Microsoft is #3" is "MICROS~3".
This is what you'd expect; so far, so good.
Go back to Windows Explorer and delete "Microsoft is #2".
Go back to the DOS box, and again type "DIR" and hit {Enter}. You
will see that there are only the two folders left, but the aliases
have not changed: the short file name for "Microsoft is #1" is
"MICROS~1", and the alias for "Microsoft is #3" is "MICROS~3".
Type "CD \Test" and hit {Enter}.
Type "XCOPY /R /I /C /H /K /E /Y Source Dest" and hit {Enter}. This
will copy the contents of the "Source" subfolder to a new subfolder
called "Dest".
Type "CD Dest" and hit {Enter}.
Type "DIR" and {Enter}. Take a look a the short file name alias for
"Microsoft is #3" and you will see that it is now "MICROS~2", not
"MICROS~3" as it was before.
And by the way, it doesn't matter if you use "XCOPY" or "XCOPY32".
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It was enough to convince me.