Note that if you don’t have this option there’s a very good chance of spyware infection somewhere, so you should scan your computer thoroughly. The scanner applications won’t restore this setting, however.

To understand what I’m talking about, open Folder and Search Options from the Organize menu, and then choose the View tab, and you’ll see that the entire “Hidden Files and Folders” radio button is completely gone!

Manual Registry Tweak

Open regedit.exe through the start menu search or run box, and then navigate down to the following key.

 

Look for a key named Type on the right-hand side and change the value to group as shown above. If the key does not exist, create a new String value.

You should be able to immediately re-open the folder properties, and the option should have returned, as you can see here:

Many thanks to Scott for finding this… I hope it can help somebody.