Microsoft has released another round of problematic OneDrive backend updates, which are breaking shared folders for a large number of users. All shared folders that previously existed in Windows Explorer are turning into web links (internet shortcuts) that open OneDrive in the browser, where users can still access the files.
While the files are not lost, the problem breaks the sync and seamless access to the files that many users rely on. The files and folders used to sync to Windows Explorer and become available for offline access as if they were files under the same OneDrive account. Now, you can no longer collaborate as a team or seamlessly share files as a family, as the members are being forced to access them through the web interface. You need to manually download and upload files instead of relying on the OneDrive sync.
Microsoft is apparently aware of the problem. The first cases of this problem were reported around June 2014. However, instead of fixing it, Microsoft has probably expanded it to affect more users in 2025. The problem started re-appearing for a large number of Microsoft 365 / OneDrive users towards the end of February and continues through March as of today.
Microsoft is aware of it but isn’t fixing it!
Microsoft writes in its help articles that it is aware of the problem where OneDrive shared folders are turning into URLs. The exact words are, “We are aware of the issue and are working on resolving it. The .url internet shortcuts will automatically convert back to a folder when the issue is resolved.”
Given how long this problem has been going on, it seems Microsoft has little interest in fixing it. It might also be the case that Microsoft wants to move these collaboration features to another (more premium) plan of Microsoft 365.
However, the Microsoft support team still claims that it’ll be fixed. They replied to a user with a similar explanation and solution as in the help article above:
We completely understand that this issue might be impacting your work. As a workaround for now, you can access the shared folder via OneDrive web to continue your workflow. The .url internet shortcuts will automatically convert back to a folder when the issue is resolved.
Our engineering team is working diligently to resolve this issue. I assure you that we are giving it our utmost priority. Currently we do not have an ETA on this issue. Your patience and cooperation are highly appreciated during this time. Please know that we are committed to resolving this issue as quickly as possible.
However, it does not affect 100% of the users. Some OneDrive accounts list the shared folders just fine and sync normally through Windows Explorer. So, re-installing OneDrive or rolling back updates will not help in fixing the problem. It seems to be a cloud-side trigger, and unless Microsoft explains why it happened, we don’t know exactly what went wrong.
What do you do if you’re also affected by this OneDrive bug?
As I mentioned above, it does not seem to be a client-side bug. So, there are no workarounds or solutions at this time. I recommend that you contact Microsoft support and write on the Microsoft forums. A higher inflow of reports through official channels will probably help achieve a faster resolution.
If you’re not too much into the Microsoft system, then you can also consider using some of the competing cloud services. Microsoft has not provided any ETAs on how long their engineering team would take to deliver a fix.