No, virtual directories are not supported in the free Rebex Tiny Sftp server. We are actually now developing API for virtual file system for our Rebex File Server component and once this is ready and done we might think about using it in the Tiny SFTP server.
Update: Virtual directories are included in our Buru SFTP server. BuruServer is built on the same core as Tiny Server but is far more powerfull.