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Hi Cyrosylas,
Thanks for sharing your experience with us.
If you go to the classic experience of the document library via clicking Return to classic SharePoint in the lower left corner, click New, can you find the custom folder content type?
Besides, we'd like to confirm the following information for troubleshooting:
1.How did you add a custom content type to Site Content Type?
>Site settings
>Web Designer Galleries>Site content types>Create
>type the Name and Description
>select Folder Content Types under Select parent content type from and select Folder under Parent Content Type
>select Custom Content Types for Existing group
>OK
If these are not your steps, please provide your detailed steps.
2.How do you add the custom folder content type to the document library?
>In the modern experience of the document library>Library settings>Content Types>Add from existing site content types
>select Custom Content Types under Select site content types from
>under Available Site Content Types, select the custom folder content type you created and click Add
>OK
The go to the document library in modern experience> click +New to check if the custom folder content type is in the list.
If these are not your steps, please provide your detailed steps.
3.Regarding "when I add the custom folder content type to my document library and select new, the custom folder content type isn't there"
Please provide some related screenshots to describe it.
4.Does the issue happen in a specific document library or site collection?
Note: to protect your privacy, please mask any personal or private information in the screenshots before sharing.
Regards,
Tina