Critical error: Apply Symbology From Layer (ArcMap 10.1)

Hello,

I recently upgraded to ArcMap 10.1. When I try to run "Apply Symbology From Layer" on a layer which is within a layer group (along with many other layers), the layer group is deleted along with all of the other layers in it. This happens whether I run it as a tool or within the Python window.

I never experienced this problem with ArcMap 10 so I believe it must be a bug in 10.1. Any help would be much appreciated.

Scott