I dug through the folder structures to find that the old Plugins folder in wp-content was /plugins/ while the 2.8.6 folder is /mu-plugins/
The plugins folder should always be /plugins/.
/mu-plugins/ are for plugins you want to run sitewide; these plugins are automatically activated; you generally never put regular WP plugins in there!
I suggest starting your install over:
If you’re upgrading, restore your backup DB and your previous MU files and read this: