Unfortunately there are no other explanations. You have to open the libraries and click on "My Documents" other wise if you just click Documents you get both. You'll find the same thing with all Libraries, Music, Videos, etc. I added  My Documents to the Favorites and that soles the problem for me. Maybe in Windows 8, not out for at least 18 months, will be different. Welcome to Windows 7.

I don't mind the public folders mixing in with the private folders. I just want to remove the actual text that says "Includes 2 locations". Do you guys have the same text and layout like mine in the picture?

Sorry, I misunderstood what you were going for.

Yes . Try this: 

Click on Organize , top left,and select Layout. Uncheck Library Pane.

I figured it out. Under the organize menu there is the layout menu. I unchecked the library option and the text disappeared. Thanks.