Found the fix: Disable OneDrive sync for the desktop folder
Note: Before proceeding, copy the files in those special folders to another folder or external drive. Please don’t copy them anywhere under Desktop/Documents/Pictures. This is because disabling OneDrive backup for a folder erases the local copies of the files. Copying them to a different location beforehand will ensure that you don’t need to download them again from the OneDrive cloud.
- Right-click the OneDrive icon in the Notification area and click Settings.
- Select the Backup tab, and click Manage Backup
- In the Manage folder backup dialog, click on the “Stop backup” link for “Desktop.”
- Click Stop backup in the confirmation dialog that appears.
The Browse For Folder dialog should now populate the items correctly!
Source: https://www.winhelponline.com/blog/browse-for-folder-dialog-empty-in-windows-11/