Thank you for posting here.
According to your description, as for the GPO to restrict users to access disk C:\, we could have a check whether this GPO is what we want.
User Configuration > Administrative Templates > Windows Components > Windows Explorer > Prevent access to drives from My Computer. It is set to "Enabled" with the option "Restrict C drive only".
This similar case is also discussed on our TechNet forum. Below is the link:
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