FULL PRODUCT VERSION :
Java(TM) SE Runtime Environment (build 1.8.0-b132)
Java HotSpot(TM) 64-Bit Server VM (build 25.0-b70, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows [Version 6.1.7601]

A DESCRIPTION OF THE PROBLEM :
This line fails with the given exception:

Files.walk(Paths.get("C:\\")).forEach(System.out::println);

Exception in thread "main" java.io.UncheckedIOException: java.nio.file.AccessDeniedException: C:\$Recycle.Bin\S-1-5-21-1123174451-621858187-3073451497-1000
at java.nio.file.FileTreeIterator.fetchNextIfNeeded(FileTreeIterator.java:88)
at java.nio.file.FileTreeIterator.hasNext(FileTreeIterator.java:104)
at java.util.Iterator.forEachRemaining(Iterator.java:115)
at java.util.Spliterators$IteratorSpliterator.forEachRemaining(Spliterators.java:1801)
at java.util.stream.AbstractPipeline.copyInto(AbstractPipeline.java:512)
at java.util.stream.AbstractPipeline.wrapAndCopyInto(AbstractPipeline.java:502)
at java.util.stream.ForEachOps$ForEachOp.evaluateSequential(ForEachOps.java:150)
at java.util.stream.ForEachOps$ForEachOp$OfRef.evaluateSequential(ForEachOps.java:173)
at java.util.stream.AbstractPipeline.evaluate(AbstractPipeline.java:234)
at java.util.stream.ReferencePipeline.forEach(ReferencePipeline.java:418)
at DirectoryScanner.main(DirectoryScanner.java:36)
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
at java.lang.reflect.Method.invoke(Method.java:483)
at com.intellij.rt.execution.application.AppMain.main(AppMain.java:120)
Caused by: java.nio.file.AccessDeniedException: C:\$Recycle.Bin\S-1-5-21-1123174451-621858187-3073451497-1000
at sun.nio.fs.WindowsException.translateToIOException(WindowsException.java:83)
at sun.nio.fs.WindowsException.rethrowAsIOException(WindowsException.java:97)
at sun.nio.fs.WindowsException.rethrowAsIOException(WindowsException.java:102)
at sun.nio.fs.WindowsDirectoryStream.<init>(WindowsDirectoryStream.java:86)
at sun.nio.fs.WindowsFileSystemProvider.newDirectoryStream(WindowsFileSystemProvider.java:510)
at java.nio.file.Files.newDirectoryStream(Files.java:457)
at java.nio.file.FileTreeWalker.visit(FileTreeWalker.java:300)
at java.nio.file.FileTreeWalker.next(FileTreeWalker.java:372)
at java.nio.file.FileTreeIterator.fetchNextIfNeeded(FileTreeIterator.java:84)

It looks like there is no way with the current API to recover from an exception when consuming the Files.walk stream. This makes the Files.walk API useless for traversing a tree of any non-trivial size where error recovery is required.

REGRESSION. Last worked in version 7u51

ADDITIONAL REGRESSION INFORMATION:
This is a new API, however the Java 7 Files.walkFileTree API does offer a recovery route through the FileVisitor.visitFileFailed method.

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
Execute this line under windows:

Files.walk(Paths.get("C:\\")).forEach(System.out::println);

Consuming the stream will fail when one of the $Recycle.Bin directories is encountered.


EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
I would expect the API to offer a way for the stream returned by Files.walk to be configured to continue when encountering an exception.

Possibly an overloaded version of Files.walk that takes an error consumer, or even a generic way of skipping errors on stream itself, for example:
Stream.onError(Function<Throwable,ContinueOrNot>) : Stream<T>


ACTUAL -
There is no way to recover from errors (caused by IOExceptions) encountered while consuming the stream created by Files.walk.

ERROR MESSAGES/STACK TRACES THAT OCCUR :
Exception in thread "main" java.io.UncheckedIOException: java.nio.file.AccessDeniedException: C:\$Recycle.Bin\S-1-5-21-1123174451-621858187-3073451497-1000
at java.nio.file.FileTreeIterator.fetchNextIfNeeded(FileTreeIterator.java:88)
at java.nio.file.FileTreeIterator.hasNext(FileTreeIterator.java:104)
at java.util.Iterator.forEachRemaining(Iterator.java:115)
at java.util.Spliterators$IteratorSpliterator.forEachRemaining(Spliterators.java:1801)
at java.util.stream.AbstractPipeline.copyInto(AbstractPipeline.java:512)
at java.util.stream.AbstractPipeline.wrapAndCopyInto(AbstractPipeline.java:502)
at java.util.stream.ForEachOps$ForEachOp.evaluateSequential(ForEachOps.java:150)
at java.util.stream.ForEachOps$ForEachOp$OfRef.evaluateSequential(ForEachOps.java:173)
at java.util.stream.AbstractPipeline.evaluate(AbstractPipeline.java:234)
at java.util.stream.ReferencePipeline.forEach(ReferencePipeline.java:418)
at DirectoryScanner.main(DirectoryScanner.java:36)
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
at java.lang.reflect.Method.invoke(Method.java:483)
at com.intellij.rt.execution.application.AppMain.main(AppMain.java:120)
Caused by: java.nio.file.AccessDeniedException: C:\$Recycle.Bin\S-1-5-21-1123174451-621858187-3073451497-1000
at sun.nio.fs.WindowsException.translateToIOException(WindowsException.java:83)
at sun.nio.fs.WindowsException.rethrowAsIOException(WindowsException.java:97)
at sun.nio.fs.WindowsException.rethrowAsIOException(WindowsException.java:102)
at sun.nio.fs.WindowsDirectoryStream.<init>(WindowsDirectoryStream.java:86)
at sun.nio.fs.WindowsFileSystemProvider.newDirectoryStream(WindowsFileSystemProvider.java:510)
at java.nio.file.Files.newDirectoryStream(Files.java:457)
at java.nio.file.FileTreeWalker.visit(FileTreeWalker.java:300)
at java.nio.file.FileTreeWalker.next(FileTreeWalker.java:372)
at java.nio.file.FileTreeIterator.fetchNextIfNeeded(FileTreeIterator.java:84)

REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
import org.junit.Test;

import java.nio.file.Files;
import java.nio.file.Path;
import java.nio.file.Paths;
import java.util.stream.Stream;

/**
 * Fails under windows.
 */
public class FilesWalkTest {
    @Test
    public void test() throws Exception {
        try (Stream<Path> stream = Files.walk(Paths.get("C:\\"), 3)) {
            stream.forEach(System.out::println);
        }
    }
}

---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
There is no workaround for the Files.walk method returning a java.util.stream.Stream.

Files.walkFileTree can be used instead, but does not offer the convenience of the Stream API.