Upload and review is another contributed assignment module that allows the teacher to upload a document when grading. So, for example, I could download a student's submission, correct it and upload it for the student to examine. It would be nice to have that functionality with the multiple file upload.
The colon issue - I have done that with upload single. When upload multiple files didn't work, the first thing I did was change the assignment type to uploadsingle. I was able to submit and grade submissions. When I took the colon out of the assignment description, upload Multi also worked.
I have never had occasion to look, but I was not aware that the other assignment types create a directory whose name matches the assignment description. The problem I ran into is related to reading that directory.
I hope this helps. The module is quite useable as it stands and, in my opinion, a much needed feature.