Cloud Files API - explorer.exe locking folders and prevents rename

We are implementing a cloud sync engine using the cloud files API. Not sure where to report this issue but I am trying here.

Everything is working more or less as expected.

However if I create a folder hierarchy of 2 or more folders, say folder A has a child folder B which has another child folder C.

Whenever I open folder C in the file explorer I am no longer able to rename, delete or move folder A.

It states The action can't be completed because the folder or a file in it is open in another program.

It does not happen when opening folder A but only when navigating into folder C.

No files are present in the folders, only the folder hierarchy and it happens every time and can be reproduced 100% on my end.

This also happens on our customers system as well as our QA systems.

I checked the open handles using Powertoys File Locksmith and the Resource Monitor and only explorer.exe has open handles on the folder and subfolders.

If I restart explorer.exe the folder can be changed again.

This is also an issue with OneDrive, so I can assume it has nothing to do with our own implementation of the cloud files API.

Also needless to say, this only happens when interacting with folders below a sync root and not on the "regular" file system.

I am using Windows 10.0.19045. The issue also seems to happen on Windows 11 but somehow less frequent.