1. Assume that the content is:
* Hello
  :LOGBOOK:
  - Note taken on [2013-04-22 Mon 16:57] \\
    hello
  :END:

2. Fold it, so that it becomes
* Hello…

3. Put the cursor at the end of the heading, and press M-RET or C-RET
* Hello…(here)

The new "*" will be in the beginning of :END:, which is incorrect.