In looking over the problem, I think I see where you were headed and that it can be fixed in addressing the $kfm_userfiles_address value.
I think, if the value of $kfm_userfiles_address does not exist (either the value is blank or it is not a valid directory), you're going to end up with the relative path of your file to / or in your case D: which is the absolute path or full path to the file:
D:/Hosting/5230337/html/FileUploads/Images/gift_giving.jp