First off, it's not an iTunes fault, but it might be a setting.
There's quite a bit of information to give you here, but it will sort out the current problem and hopefully prevent it in the future.
By default, all music copied from CDs on a Windows computer is added to the parent Music folder, so on a Windows PC, putting the album into a sub-folder of the Music folder is correct. Obviously though, the Various Artists folder is not correct in this case, but we'll come to that. The first thing to check is where your iTunes is set to place music imported from CD.
Using the screenshot below:

- on iTunes' top bar menu, look in Edit/Preferences/Advanced (1.)
- make sure that the iTunes Media folder location (2.) is where you want it to be; that is, the folder above the one in which both artist folders and the compilations folder will be saved. (My iTunes library also has a Various Artists folder, I don't know why, although I suspect it's something iTunes used to do.) In my screenshot my iTunes uses the iTunes Music folder, but later versions of iTunes use the iTunes Media folder instead. Either is correct, but just make sure that the last folder is not compilations. If it is, then every CD rip will be placed in compilations.
Next;
iTunes gets the track information from Gracenote, and while I do not know exactly where how Gracenote obtains the track information, it's what iTunes has to work with. One thing I have noticed though; record company employees don't always get it right and often the artist-released CDs have no genre information at all. Usually, the fans do get it correct.
The common issue is that "greatest hits" albums by any artist are nearly always (if not always) identified by Gracenote as compilations, while iTunes does not consider them to be compilations. However, I have checked and Emotional Traffic is not a compilation of Tim McGraw's previous work (nor is it a greatest hits type album), so tracks on the the album should have been placed in Music/iTunes/iTunes Media/Tim McGraw/Emotional Traffic.
In theory I believe what iTunes does first is attempt to use the Album Artist tag to identify the artist of the album, but if that tag has not been filled in (as it often isn't), then it uses the Artist tag instead. On a true compilation album, the Album Artist tag would have the text Various Artists in it, thereby adding that album to the Music/iTunes/iTunes Media/Compilations/<album title> folder.
So first of all, check the Emotional Traffic tracks to see what text is in the Album Artist field. If it states various artists, that is the cause of that problem. (If it does not, I'm not sure what else could be causing the issue.)
There is another issue caused by incorrect cataloguing. That is when an album has guest artists. If some tracks on a single-artist album have guest artists, the correct way to label the album is:
- the track title lists both artist and guest artist in the artist tag
- the album artist tag must have the main artist name only in there
It's not unknown for albums with guest artists to be incorrectly identified as compilation albums. They most definitely are not.
To prevent these issues from happening in the future, set iTunes so that when you place a CD in CD drive, it displays the CD instead of importing it without letting you make any amendments.
See the screenshot below:

- go to Edit/Preferences/General (3.)
- on the General tab, check that the When you insert a CD: (4.) option has the Show CD option selected
This will then display the CD in the Import CD window and you will have the opportunity to check and correct the tagging issues.
When a CD is detected and shown by iTunes (5.), tap the CD Info button (6.):

The compilation tag (7.) should only be ticked (checked) if the album is a compilation of tracks by different artists. Once that's done, tap the OK button to return to the Import CD panel - but don't import yet.
On the Import CD panel, right-click a blank area on the top bar menu - that is anywhere except the text itself. If you click the text it will change the sort order of the album, which can cause other issues. If you do click text by mistake, you will see an arrow next to the text (and it's this that can cause the problem). To fix this, click on the number column to the left so that its arrow is pointing upwards (as shown in the screenshots):

So right-click the menu bar:
- from the pop-up menu, select Album Artist to add that column to the display
- in the Import CD window, overtype any information in these tags that is wrong (such as spellings, your choice of genre and the album artist)
Note; on single artist albums, iTunes is not concerned if the album artist field is blank, but for:
- albums with guest artists on any track, the album artist field must have the main artist's name in the album artist tag
- true multi-artist compilation albums, the album artist field must have the text Various Artists in the album artist tag
Now you can import the album.