Cloud mirror - Cloud Files API - explorer.exe locking folders and prevents rename of directory

[pdupont1]

We are implementing a cloud sync engine using the cloud files API. Not sure where to report this issue but I am trying here.
Everything is working more or less as expected.

However if I create a folder hierarchy of 2 or more folders, say folder A has a child folder B which has another child folder C.
Whenever I open folder C in the file explorer I am no longer able to rename, delete or move folder A.
It states The action can't be completed because the folder or a file in it is open in another program.
It does not happen when opening folder A but only when navigating into folder C.

No files are present in the folders, only the folder hierarchy and it happens every time and can be reproduced 100% on my end.
This also happens on our customers system as well as our QA systems.

I checked the open handles using Powertoys File Locksmith and the Resource Monitor and only explorer.exe has open handles on the folder and subfolders.

If I restart explorer.exe the folder can be changed again.
This is also an issue with OneDrive, so I can assume it has nothing to do with our own implementation of the cloud files API.
Also needless to say, this only happens when interacting with folders below a sync root and not on the "regular" file system.

I am using Windows 10.0.19045. The issue also seems to happen on Windows 11 but somehow less frequent. Edit: The issue does only seem to happen on Windows 10. The alleged issue on our customers Windows 11 PC turned out to be another issue.

[vembu-karthick]

Issue is getting reproduced for me