Late on the reply here after my 22H2 reload, sorry. During re-setting up OneDrive, I remembered that I don't use the 'Manage Backup' to back my Desktop/Documents/Pictures folders, but I use Symbolic Links. Using this Symbolic Link method, everything works fine here FWIW.
In case folks are wanting to get their Desktop (or other folders) syncing back with OneDrive using Symbolic Links,
I'm tossing up a Cheap Trick post on how to set them up on Windows 10/11. Should work on older versions back to Windows Vista, but your mileage may vary.