As mentioned before, the problem is caused by the plugin Coffee-Byte plugin for Eclipse. I managed to work-around the problem, for myself at least; disabled everything except Import Statements, Source Headers, and User Defined Regions. I had to manually add regions to the template of methods to get them to fold automatically, but it's a small price to pay for having custom folding.
Also, if anyone is interested in fixing it, the error only occurs if Report problems as you type is enabled in Preferences-Java-Editor. If disabled, then all types of folding work.
Update: I'm currently using Eclipse version Kepler Service Release 1, and build id 20130919-0819. I've re-enabled Normal Methods, Constructors, and and setters; so far, the assertion error hasn't appeared. It seems that the problem has been fixed.
http://stackoverflow.com/questions/11...