Dear Ryan Chan1,
Good day! Thank you for posting to Microsoft Community. We are happy to help you.
I carefully went through your question.
Based on the error message "request was cancelled by event received. if attempting to delete a non-empty folder, its possible that its on hold". This error usually happens when your OneDrive for business is on hold, which is related to retention policies implemented by your Organization IT Administrator to prevent data loss.
Please go to your OneDrive Site Content Page and check if there is a folder named "Preservation hold library".
For example, if your OneDrive for Business URL is:
https://domain-my.sharepoint.com/personal/username_domain_onmicrosoft_com/_layouts/15/onedrive.aspx,
please modify it to the following:
https://domain-my.sharepoint.com/personal/username_domain_onmicrosoft_com/_layouts/15/viewlsts.aspx?view=14 and then access this URL. Then you will log into the OneDrive site content page. Please check if there is a library called Preservation hold library.
If you can find Preservation hold library in your OneDrive for Business site, this means your Office 365 global admin made your site on hold. Please understand that when the site is on hold, documents can be deleted. When you delete them, they will get moved to Preservation Hold library. But if you have a folder with multiple files in it, it will not be able to delete the Folder directly. This is how Preservation hold works to prevent the data loss.
Due to this situation, you need to collaborate with your Office 365 global admin to remove your OneDrive site from preservation hold policy. Your Office 365 admin could verify it from the Office 365 Security and Compliance center.
Here are some articles that reference Holds and DLP:
Overview of data loss prevention policies
Add content to a case and place sources on hold in the eDiscovery Center
Note: To remove your OneDrive site from preservation hold policy, It can only be done by the Microsoft 365 Administrator (Your IT Admin) via Microsoft Purview. Log into M365 Admin Center with your Admin account > Compliance > Data Loss Prevention > Policies, and then remove the policies that are set to OneDrive. Therefore, if you are Admin, you can follow the above steps. and If you are not an admin, kindly contact your Tenant Admin to help you remove these policies.
If you have any other questions, kindly feel free to post back and point it out.
Thank you for your kind understanding and cooperation.
Sincerely,
Edwine | Microsoft Community Moderator