Yes, you are correct. It's a bug in the Windows 11 Explorer.
The original release of Windows 11 was fine, in regards to setting folder type. The bug was introduced with one of the earlier updates to Explorer (well over a year ago) and is still not fixed in the 23H2 pre-release I have tested. The forum owner here informed me that Microsoft is aware of the issue and are working on a fix, but it has yet to be mentioned in any list of known issues and, AFAIK, no date has been set for such a fix.
As you've seen, the folders are stuck at type "General items" on USB drives (ones that do not mount as "local disk"). And you may have noticed that on a "local disk", such as drive C, the folders remain stuck at the type that Windows selects with its "automatic folder type discovery". On Windows 10, you could override that selection and choose whatever type you want for a folder and its subfolders. Windows 11 keeps rescanning the folder and resetting the folder type, which slows things down and disrespects the user's choice.
Until Microsoft fixes this bug you can avoid the issue by using the Windows 10 Explorer that's still included in Windows 11. You can do that by opening the Control Panel and then clicking the up arrow button once or twice (depending on your Control Panel view). You can also open the old Explorer more directly by using this little OldExplorer launcher I made.
But please note that you must exclusively use the old Explorer for your folder type choice to be respected. Once you go back to the new Explorer, the folders will return to type General items on your USB drives and whatever is automatically selected on local disks.
To set your Windows 11 computer to use the Windows 10 Explorer permanently, you can use one of several Explorer patching tools that can be downloaded. I recommend installing StartAllBack and setting it to its "Kinda 10" mode.
Also note that if you prefer to have all folders everywhere to have exactly the same view, regardless of contents, you can do that using my WinSetView app. You can also use it to set the default view for each folder type, but it cannot fix the bug of not being able to set the folder type for a whole tree. For now, that can only be done by using the Windows 10 Explorer, as I previously described.