"Sharing/People" icon beside folder in SPO

This is a query I've been looking into recently that I think I've just resolved as I've been writing this, but I'll post anyway to get a second opinion as I'm still unsure why the feature exists in its current form. 

To start, the icon I'm making reference to I've attached as a screenshot titled 'Share icon'. 

This is because this is the icon that is used in OneDrive to indicate that a file or folder has been shared. 

Additionally, when you go into a folder with this icon and look at the breadcrumb, you'll see this icon again, except this time when you hover over it, text will pop-up indicating that 'This is a shared folder'. 

This lead me to believe that this was a sharing feature.

The concern here is that the sites I'm in have sharing locked to those with existing access to the site. 
I checked manage access on the folders with the icon and ran a sharing report which came back as expected which alleviated worries but still brought me no closer to a solution. 

Another annoying feature of these shared icons is that they would appear and disappear regularly. One user would see them while another wouldn't and icons that were there in the morning would be gone in the afternoon. 

I happened across what I believe to be the solution while searching folder details for any shared activity when I noticed when files were modified. 

Folders with the icons had all been modified in the last 30 minutes (or so). 

I tried to recreate it by adding a file to a folder and the icon did appear. 

So I believe the icon appears when items within a folder have been modified recently. 
I don't understand why that particular icon is used and found no information on it online. 

If I've missed anything here, please let me know, or if you've had similar experiences with this, I'd be glad to hear as well as this has been driving me mad the last 24 hours. 

Cheers, 

Chris