For those who have joined this conversation, but are daunted by the 239 pages of comments and so don't read through everything, this needs to be repeated - this problem is on the Microsoft server side. The "work around" and "hacks" aren't going to solve your long term problems, only MS can do that.
WHAT HAPPENED:
Around May/June of 2024, MS started deploying a new version of the OneDrive servers. The old system is V1.0, and the new one is V2.0.
They began slowly migrating people.
THE ISSUE
The sharing of folders and documents with local copies is incompatible between the two systems. Did MS know this? It's hard to tell, however, they never admitted that this was the problem, instead leaving people wondering why it's taken them 1 year to solve a problem that is critical to so many people.
The number of reported cases increased as the migration to V2.0 progressed. In particular, for people, say, on a family account, there is no coordination between when family members migrate.
THE SOLUTION
There isn't one except to wait until everyone you share with or shares with you has been migrated.
When everyone is migrated, those useless links should turn back into real files. Unfortunately, that means up to 300 million people's OneDrives downloading all those files again. The time to download all of that is probably not going to be short, as the bottleneck will be MS's own servers.
Given this fiasco, you can either jump ship on Office + OneDrive and move to alternative Office and Cloud solutions, or wait this out.
As this gets lost in the swamp of new messages, I thought I'd just repeat it with an addendum, because the proposed solutions are temporary bandaids, just lipstick on the gorilla.
Some people are replying that even when everyone is one V2.0, problems still arise in synchronization. The best solution seems to be:
- Stop sharing the folder(s).
- Create new ones.
- Move all the content form the previously shared folder(s) top the new ones, and delete the old ones.
- Share the new ones.
To know if you are on V1.0 or V2.0,
- use the web interface, click on the settings (cog wheel) in the top corner and select options.
- If the left-hand side navigation ends with "search", the account is still on V1.0, otherwise, it is on V2.0
- There is a more complex solution using the inspection mode of your browser to check folders shared with you. (from Petr Vyskocil) Open OneDrive on the web, open browser's dev tools (F12 key), switch to network tab.
Click on the folder belonging to user you want to investigate (yours or any of the shared folders). You'll see bunch of requests fire off. One of them will start either withhttps://api.onedrive.com/v1.0/drives/(legacy OneDrive, this URL has been used since like forever) orhttps://my.microsoftpersonalcontent.com/_api/v2.0/drives(migrated new OneDrive).