Cannot open or save files from Editor to a network share (4246867)

When opening files in the Editor or dragging and dropping a file from a network share, the following error message is displayed:
"File does not exist".

When saving files from the Editor to the network share, the following error message is displayed:
"Cannot create file". "The filename, directory name, or volume label syntax is incorrect".

The same files can be opened and saved to the network directory using another application such as Word or notepad. The same applies when the directory is copied from the network to a local drive.

Go to menu View | Toad Options | Files | General and uncheck the 'Use Universal Naming Convention (UNC) for file and folder names' option.