Synced libraries folder sharing icon greyed out in Windows 11

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I have a SP Hubsite with several linked Team sites. All the libraries are all synced in my OneDrive. 

I upgraded to Windows 11 last week. Since then I have noticed that when a site is set to allow external sharing the sharing icon is greyed out (in the new file explorer toolbar) when I try to share a folder. The icon is only active when I'm in a single document. 

 
This only happens in libraries that are set allow external sharing. Libraries restricted to staff accounts seem to allow folder sharing. It also only happens in file explorer - I can share the same folder externally in SPO.

 

Does this mean it is not possible to share a folder (internally or externally) from file explorer when the site is set to allow external sharing, in Win11?

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