Hi @Rick
Thanks for the detailed case description. We fully understand the functionality you require.
However, according to our test, we regret to inform you that the functionality you require is not currently supported. In Teams or in SharePoint, navigate to the appropriate document library, select the folder, and click Share.
Select "Manage access" and edit the member permissions to "Cannot download".
This will prevent team members from downloading files, but when you assign permissions in this way, members will not be allowed to move documents from one folder to another.
If you would like this feature to be added, please submit feedback in Microsoft Feedback. Many features of our current products are designed and upgraded based on customers’ feedback. With requirements like this increase, the problem may well be released in the future.
Thanks for your understanding and support.
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