Hi,
Where is this folder located? On the same server where you are syncing from?
Azure File Sync does not create a duplicate folder on the source server.
How Azure File Sync works
The entirety of the Azure file share will be synced, with one exception: A special folder, comparable to the hidden "System Volume Information" folder on an NTFS volume, will be provisioned. This directory is called ".SystemShareInformation". It contains important sync metadata that will not sync to other endpoints.
Best regards,
Leon