This indeed is STILL an issue affecting a lot of people. I am an IT professional and I had a nightmare scenario in which a businesses computers started dropping one at a time, with the same problem - the shared folder everyone depended on started turning into internet shortcuts. It didn't matter which version of Windows 11 they used, or their hardware configuration.
The problem did not seem to affect the user's phones. After wasting a bunch of time uninstalling / reinstalling - removing shares/reinviting and adding - playing with different builds and configurations this is the best I could come up with. This problem started about 3 weeks ago.
Even though the company is paying for and using the Microsoft 365 workspace account, the ones affected had somehow set up all of the affected OneDrive accounts as a personal account, but it hadn't ever affected the functionality.
The best I could come up with in the short term was to install RaiDrive - an awesome program that assigns a physical drive letter to a hosted file storage server like OneDrive. Fortunately RaiDrive is free for personal OneDrive accounts but not for Workplace ones, which is fine because only the personal ones were broken.
After I installed the program, the drive letter worked perfectly as a replacement for the OneDrive folder. Some users insisted on using the OneDrive folder instead of the drive letter, so I simply made a shortcut to the new drive's shared folder and placed it in their OneDrive folder, removing the old .url shortcut.
Make sure when using RaiDrive for the Onedrive to stop the connected service and check the "shared folder" option for the shared folders to show up in the new drive letter.
This is not an official fix of course but it is a workaround that is almost transparent to the end user. I can't believe after this amount of time, I have had such a hard time getting an official "fix".
One of the only problems I have encountered so far is that the "autosave" feature in Word and Office in general can't save to the folder it wants to, and since Microsoft offers no option to change it's autosave destination or features, the autosave won't work seamlessly like it is supposed to. Since it maintains a "recovery" snapshot locally, in the worst case scenario if it is not manually saved before a crash or accidental reboot, I know I could still recover a document with a little tinkering if absolutely necessary.
I hope this helps save someone some serious time banging your head against the wall even if this is not an official "fix".