I experience the same issue. It has that red box saying to sign in, while still showing all of my files with my personal account. However, when I click that sign-in box at the top right, it auto populates an email that I am not associated with.
When I enter my personal email, it says that I need to sign in with a work email, which I do not want to do. I am on a personal device, under a personal email, via a personal MSFT 365 account and I would like to sign in with this email, but it will not let me. However, when I sign into anything else (MSFT store, or office suites; i.e. word, excel, etc.), they all open with the personal email I am using to sign into the file explorer. Why is that?