Hi Ross,
Thank you for providing the detailed information.
The AI-generated answer is generally aligned with the correct troubleshooting direction. Since the issue also occurs directly in OneDrive on the web and you receive the message “Tenant sites are in read-only right now,” the problem does not appear to be caused by the OneDrive sync client or the available storage on your computer.
This message usually indicates a SharePoint or OneDrive site lock, insufficient tenant-level SharePoint storage, tenant maintenance, or a subscription-level restriction.
Please ask your IT administrator to try the following steps:
1/ Run the Locked Site diagnostic
The diagnostic checks whether the OneDrive site is locked or archived and may provide an appropriate corrective action. Please note that it is not available in GCC High, DoD, or Microsoft 365 operated by 21Vianet.
The affected OneDrive URL can normally be found under: SharePoint admin center > Sites > Active sites.
For more information, please refer to: Self-help diagnostics for SharePoint Online and OneDrive administrators
2/ Determine whether the issue affects other users or sites
Please check whether:
- Another user can create a folder in OneDrive on the web.
- Files can be created or edited on another SharePoint site.
If only one OneDrive site is affected, a site-specific lock, archived state, or site-closure policy is more likely.
If multiple OneDrive or SharePoint sites are affected, the administrator should prioritize checking tenant storage and subscription status.
3/ Check the organization’s SharePoint storage
The affected user’s OneDrive usage of approximately 1 GB out of 1 TB does not confirm that the organization’s separate SharePoint storage pool has sufficient capacity.
In the SharePoint admin center, review the tenant storage usage under Sites > Active sites. The administrator should also run the following diagnostic:
Microsoft 365 admin center > Help & support > SharePoint Tenant Storage
If the tenant has exceeded its SharePoint storage allocation, SharePoint and OneDrive sites may be placed in read-only mode. The administrator must then reduce storage usage, archive or remove unneeded content, or purchase additional SharePoint storage.
For your reference: SharePoint Online out of storage space
I would not recommend running Set-SPOSite -LockState Unlock unless the Locked Site diagnostic or SharePoint admin center specifically confirms that the individual OneDrive site has a ReadOnly lock. If the tenant storage pool is full, manually unlocking an individual site will not resolve the underlying storage restriction.
After completing the applicable action, please rerun the Locked Site diagnostic and test New > Folder in OneDrive on the web.
If the tenant has sufficient storage and no site lock, service incident, or subscription issue is detected, please open a support request through: Microsoft 365 admin center > Help & support. Include the exact error message, the affected OneDrive URL, the time the problem occurred with the time zone, and the results of both diagnostics.
For instructions on opening a support request, please refer to Get support – Microsoft 365 admin.
I hope these steps help identify and resolve the restriction. If you have any concerns, please let me know.
Best regards,