Rather than being resolved, the situation appears to be worsening. I have the MS Family subscription, and there are six members in my setup. Last June, when the problem first arose for us, I noticed that four of the five sharing with me had reverted to url links rather than Explorer files. The fifth, though, remained as Explorer files until this week. Now, their setup has also changed to a url link, but, on top of that, three of the other four url links have disappeared completely, and, even though I try to reshare them as links on the website, I just received the message that the link already exists, and nothing happens. I can still view and update all of the files directly on the website, but not from File Explorer any more. In addition, when this happened, I saw that the one link that remained had been duplicated, with the duplicate having my computer name attached to it. This process actually took a full twenty-four hours to finish, as the OneDrive app on my laptop informed me that it was processing a quarter of a million files and, while that was happening, none of the files that I changed on the laptop were updated in OneDrive - it even led to some duplication of files, again with the computer name appended to the original file name, making it quite difficult at times to determine which was the most up-to-date version.
I don't know if this is happening because Microsoft are trying to resolve the issue or not. I know that some people on here have come up with extremely technical ways of 'fixing' the problem {most of which, apparently, don't work}, but that is definitely NOT the solution. I am certain that the majority of users are, like myself, just ordinary people for whom all of these technical options are far beyond their capabilities - indeed, that's why we pay companies like Microsoft to do it for us. If we could do it ourselves, we would, and we'd save ourselves money as well. For my part, my system is set up to always update both Windows and Office, so it should be on the current versions at all times.
One final note - I have seen some people on here complaining about the forthcoming price rise due to Copilot - just to let you know, if you cancel your Microsoft plan, their system then gives you an option to revert to the Basic plan that you are already on, and, if you click to accept this, nothing changes and you won't have to pay the extra amount for a feature that many people have no interest in whatsover. Obviously, Microsoft aren't going to publicise this openly, as they want people to pay the extra.