Not sure if this is your problem, but...
1) not all browsers will look for the named version from the link, and instead will use the one in the same directory as the file being served named 'favicon.ico' -- which is why placing it in a subdirectory and giving it a name other than that is usually bad practice.
2) your link does not target all browsers... and the use of a type on the LINK tag can in fact do more harm than good on it working.
I'd suggest renaming the file favicon.ico, moving it into the same directory as where your HTML is being served from, and using THIS for the link instead of what you have:
<link rel="shortcut icon" href="favicon.ico" />
Though that IE CC after on such a simple page calls the CSS used into question, and therin the markup which with the missing headings, non-breaking spaces doing padding's job, non-semantic markup, comment placements guaranteed to cause rendering bugs in legacy IE and some versions of FF, and that silly 'resize text' thing which likely means you didn't just do the right thing and declare your fonts in %/em...
It has issues.