According to the test you suggested, I have an SPO account, yet I'm still experiencing the issue. The account sharing the affected folder with me also seems to be SPO, based on the fact that the folder URL does indeed contain "LinkifiedSPOShortcut-Prod&CallerId=Sync-Windows".
It seems there are 2 types of personal Microsoft accounts.
SPO and normal account (Production acc).
When we share a folder from SPO account to a normal account and add it to our normal account's 1drive, it displays as internet shortcut.
You can check the same by right-clicking on internet shortcut of shared folder >Properties.
you will see, "LinkifiedSPOShortcut-Prod&CallerId=Sync-Windows" in the shortcut.
Now how to find whether your Microsoft account is an SPO or not?
Log onto OneDrive website in a browser, trying sharing a file/folder to anybody, the UI windows will be modern one when compared to Prod acc (normal acc)
Normal acc share windows below:
SPO acc share windows below:
Microsoft acknowledged it: https://support.microsoft.com/en-us/office/add-and-sync-shared-folders-to-onedrive-for-home-8a63cd47-1526-4cd8-bd09-ee3f9bfc1504
I am assuming it will be fixed when all Prod/normal accounts are migrated to SPO.