Yes! This worked for me, too. I was having the same annoying issue of not being able to rearrange items in Quick Access.
I'll add one note that may be helpful: once you've unclicked Show All Folders, the Navigation Pane displays differently, which may be slightly annoying, too.
However, I noticed that if you click the Show All Folders option after you've rearranged the items in Quick Access, the Navigation Pane looks the same as before with the advantage of the items being arranged as desired!
So rearranging is possible, albeit more tedious now.
Not sure why this was done by MS, but I'm guessing that it's an oversight.
Cheers to all!