It looks like this issue was introduced in one of the following versions:
Version 22.253.1204.0001 (January 9, 2023)
• We've resolved product issues to improve the reliability and performance of the OneDrive sync app.
• New features gradually rolling out:
• Top down deletes. We've changed how OneDrive sync propagates deletes to the backend, allowing the web recycle bin to match the actions of the user. In the past, if a user deleted a folder, all the contents of the folder would show up as individual items in the recycle bin. With this change, users would only see the parent folder in the recycle bin, allowing them to restore everything easily, and quickly.
Version 22.238.1114.0002 (December 2, 2022)
• We've resolved product issues to improve the reliability and performance of the OneDrive sync app.
• New features gradually rolling out: • Updated settings experience. We've updated the Settings experience to make it easier for users to manage OneDrive Sync.
The one from 2022 definitely removed some Settings that used to address this topic.
Source: OneDrive release notes - Microsoft Support