Good question, I see that the setting is still there, and I remember trying to do this as well and actually you probably need to change the folder icon to a different icon altogether, unless you use a Windows 10 system and save those folders with the icons showing over the folder to onedrive, then they can sync to your Windows 11 device. I know this because I have several folders with floating icons over them on my desktop, most likely from Windows 10 and saved and synced to onedrive. Good Luck.