Great news ralph, I got it done. You provided me with some vital information and insight about the ICO files themselves I couldn't find anywhere else. Here's the solution to the problem:
As a matter of fact, ANY picture will do for custom folder icon, as long as it is properly converted into the ICO file (with the right properties attributed to it). This can be done with an ICO file converter that actually works. I used the "ICO converter", which was kindly provided by some random reddit user almost 10 years ago in a tech related thread. Converting the pictures to 256 x 256 pixels with 32 bits works perfectly fine.
Now, the catch is, that Windows will take issue with the place you save your ICO files and how you name them. After a lot of testing, this is what I've found:
※ If you've named your ICO file with the exact same name as the file that it will correspond to, it won't work.
※ After changing your Windows folder with a custom icon, you'll want to never touch the ICO file again. If you move the ICO file around or rename it, the folder that it was associated with will revert back to its original state.
※ The place that you save your ICO file to will determine whether or not it will actually work. After messing around a lot I've realized that saving it in the Downloads folder and the C: drive will actually work, but doing it in the Documents, Music, Videos or whatever, won't.
※ Choosing to put your ICO files into a folder (you'll probably want to do that to keep them organized) may cause them to stop working depending on where you chose to save the folder that contains them
※ Naming your ICO files with a non-roman scrip will cause them to not work at all (my PC is in Japanese). Make sure to name your ICO files with Roman (English) letters. So don't you go naming stuff "書類" or "画像", it won't work.
The optimal solution to the problem is to create a new folder, dump all of your ICO files inside it, move that folder to the 1st layer of the C: drive and never touch them again. also create a shortcut to the folder that contains the ICO files for easy of access later. That worked out perfectly for me.