Ok so having the same issue on our end. I have it logged with MS support but who knows if/when they will get back to me.
Some things I have found that snap it out of it is running anything as admin on the users session. Why this works I have no idea but it seems to.
I found this out when I was attempting to run ExShell which requires elevated rights, upon running it with my admin creds. Upon doing so I went to test and was surprised to see the issue was gone, a little annoyed as I wanted to test...
I then tried on another machine and ran ExShell as admin but had the same thing happen where the issue fixed itself.
A third session had the issue so I decided to run CMD as admin and the issue was fixed in Explorer!
This was earlier today so I don't know if the issue will come back on this session or just a fresh session but this has to be some kind of indicator of the cause I just cannot figure out what.
Can some of you test this yourselves and see what you find?