Welcome =D,
Thank you for providing the screenshot and Windows build information. Since the same “File system error (65535)” occurs when creating folders in multiple locations, I suggest first checking the Windows system files rather than focusing on permissions for one particular folder.
Before proceeding, could you confirm two things?
- Can you create a folder directly under a simple local location such as
C:\Users\Public\Documents? - Can you create a folder from Command Prompt by running
mkdir "%USERPROFILE%\Desktop\TestFolder"?
Also, please repair the Windows system files:
- Search for Command Prompt, select Run as administrator, and approve the prompt.
- Run:
DISM.exe /Online /Cleanup-image /Restorehealth - After DISM completes successfully, run:
sfc /scannow - Restart the computer when the scan finishes, then test New > Folder in File Explorer again.
Looking forward to your update.