The following:
  program/steps/mail/compose.inc :: rcmail_store_target_selection()
  program/steps/settings/edit_folder.inc :: rcmail_folder_form()

both try to localise mailbox names.

Push the logic down into the folder_selector() method which can use:

  $this->config->get('show_real_foldernames')

to decide the correct default behaviour.

Clients functions and methods can still override by adding 'realnames'
named parameter to the folder_selector() call. The obvious example is
the Settings -> Preferences -> Special Folders screen.