I'll answer my own question because I found lots of people asking this on the web and nobody providing an answer.
I found through trial and error that if you use the Path.GetFullPath method to calculate the value to assign to the TargetPath property, the output is in a format that's recognized as a folder path, so the system will automatically identify it as a folder shortcut and assign the corresponding icon.
与恶龙缠斗过久,自身亦成为恶龙;凝视深渊过久,深渊将回以凝视…