Processes in Microsoft 365 for setting up Office apps, redeeming product keys, and activating licenses.
Dear AdminVlabTech,
From your description, there seems to be some issues in the migration process and the group policy configuration. In some situations, the domain controller may also cause some issues.
You can check the thread for more information .
Login stuck at "Applying Folder Redirection policy" - Microsoft Q&A
The SharePoint Migration Tool (SPMT) should support migrating your OneNote folders to Microsoft 365.
If you haven't tried that, I suggest you try that to see the result.
About "Also I noticed OneNote doesn’t get migrated using Migration Manager. When the user logged on and open their OneNote all their notebooks were gone.", are the notebook folders saved locally?
Regarding "those reappeared after cutting them over to OneDrive on their next logon.", do you mean that the files deleted from the known folders appear in OneDrive for Business again? If the group policy takes effect, the changes in the known folders should be synced to OneDrive for Business at the same time. Does the issue happen with all users? Could you check whether there are some sync issues with the users' OneDrive sync clients?
Thank you for your effort and time.
Sincerely
Cliff | Microsoft Community Moderator