Actually, the inner configuration object is indeed renamed (no duplication at this level). But it’s true that the build configuration output folder itself is not renamed (and then a new one with the new config name is created).
The build configurations rename facility is implemented in the Eclipse CDT core.
About the non-active configs, the new folder is not created since these output folders are created only when the corresponding configuration is active. E.g. when you create a project, only the active configuration folder is created, not the other ones.
But, when you create a New configuration in an existing project, its output folder does appear in the Project Explorer, but it doesn’t appear in the ‘Manage Configurations’ list until you close and re-open it!
The explanation of this strange behaviour:
we have indeed a known GUI bug in the Manage Configurations list, which doesn’t display newly created configs until the dialog is re-opened. But since the newly created config is immediatly set as the active one, its output folder is then created on the Project Explorer.