Had the same problem, turns out my BitDefender blocked OneDrive from creating a folder in a "protected space". Switched off the protected files function, created the folder and then switched BitDefender back on. Voila!
@AndreDuminy thank you so much !!! That worked like a charm :-)
I was about to do all kinds of complicated stuff to try and resolve the issue and saw your post by pure luck. Opened BitDefender and checked the file protection tab and sure enough, it was blocking access to OneDrive. Turned the function off, went back to
OneDrive prompt, clicked a few things and voilà, it was saying that I already had a OneDrive folder on my drive and wanted to know if I wanted to use that one. Of course !
Clicked that and a few seconds later, everything was back to normal !!!
One thing I did before doing this was to update BitDefender which took 20-30 seconds.
Thanks again !