Many clients do not follow the published ActiveSync protocol specification. In fact, even some of Microsoft's products are guilty of this. This page attempts to document some of these idiosyncrasies. Horde_ActiveSync attempts to work around those issues that are possible to do so. Some broken behavior seems to be wide spread, and are documented in the General section. More specific behavior is documented in client specific sections.
This status code is issued in response to a SYNC request when the server is unable to locate the folder data in the hierarchy cache. I.e., the folder looks to no longer exist. This can happen when something causes the server stored state to disappear (like when explicitly removing a device from the server) or when something corrupts the stored data. This is supposed to trigger the client to issue a FOLDERSYNC request to freshen the hierarchy cache. Some clients will continue to issue the exact same SYNC request in response to this status code, causing a sync loop. Other clients will accurately issue the FOLDERSYNC request, but fail to update their local cache. Outlook 2013 does this. On receiving new FOLDERSYNC responses, it continues to issue SYNC requests on the old folderids (though it DOES reset the synckey, so something is happening in the client, just not the correct something).