Unfortunately escaping slashes is still a pain in WindowTester.
You have to look very carefully at the error message:
No tree items found for 'C:/Users' - wait then try again."
Compare this with the string given in the TreeItemLocator:
"C:\/Users/me/Folder/file1.txt"
Escaping the first slash obviously worked, but not the second one. So every forward slash needs to be prefixed with a backward slash. The correct string should then be:
"C:\/Users\/me\/Folder\/file1.txt"