Please bring back the ability to freely arrange icons within folders "DISABLE AUTO ARRANGE"!

There's much more to it than that. As noted, you can still apply the registry settings that allow free arrangement of icons within folders, but, as of Windows 10 1703, the positions are not saved. The code that provided that functionality may have been completely ripped out or may be disabled. If it were disabled in such a way that it could be enabled, I'm sure we would have seen a third-party tweak for that by now. It's unlikely that anyone can build an app to add back that capability to File Explorer because developers don't have access to Explorer's source code and Explorer's add-in support is pretty much just the option to add file handlers that can be launched via a right-click. Icon arrangement in Explorer (i.e. not in a completely separate file manager), similar to what's still supported for the Desktop, would have to be provided by Microsoft.

AFAIK, Microsoft never explained why they removed the feature. Their change history blogs are very marketing-driven, so they tend to not mention features that have been removed. For example, this feature was first turned off (but not completely removed) back when Windows 7 came out, but I found no mention of the change in the blogs. It's logical that there was some reason in regards to performance, reliability, or support for newer hardware (e.g. higher dpi monitors), that drove the decision. If I ever come across an official explanation, I'll be sure to post it here.

Let Microsoft know about your desire for this feature via the Feedback Hub (press ⊞-F in Windows).

秀まるおのホームページ(サイトー企画)－秀丸ファイラーClassicの紹介 (maruo.co.jp)

Windows 7以降廃止された「アイコンの自動整列」の解除、「等間隔に整列」ができます。

Hidemaruo's Homepage (Saito Kikaku) - Introduction of Hidemaru Filer Classic (hide-maruo-co-jp.translate.goog)

You can cancel the "automatic arrangement of icons", which has been abolished since Windows 7, and "arrange at regular intervals".

It is just that dammed name one, if that could be 'unticked' we would be home free:

"Microsoft may have determined that very few users were interested in arranging icons manually, other than on the Desktop. When I search the topic, I get many hits on arranging Desktop icons, but next to nothing in regards to arranging icons within folders. It never appeared to be a hot topic. It's obviously super important to you. It just doesn't appear to be important to a lot of other users."

I don't know who Microsoft talked to to determine most people don't use icons in folders - I know they didn't ask me! Why would they take away such an option! I also find it EXTREMELY frustrating and wastes precious time every day. Just give users the option and let them decide how they want their folders to look!

Here is another long thread about same thing: How to manually arrange files in a folder on windows 10 (Disable Auto Arrange) (techsupportall.com) (NOTE suggestions do not work or at least not now)