In JIRA OnDemand, it is not possible to configure JIRA to read file system messages from a subdirectory within the 'import/mail' subdirectory of the JIRA Home Directory.

The 'Folder Name' field on the 'Mail Handler' dialog box is used for this purpose.

Hence, at least this field (and most probably the 'Local Files' option in the 'Server' field too), should not be present on the 'Mail Handler' dialog box.