I have reproduced this after testing this morning. I have raised it as a bug here
Would recommend you vote on it to push up the agenda. As a workaround whilst Microsoft fix this I would set the quota at 86% or 84% - this works without issue as shown below
Also, 85% could very well be the default notification which may explain it - but it needs some visual prompt otherwise admins have no clue whether it applies or not.
Hope that answers your question!