Hello,
I landed on the "icon overlay not displaying" issue on a new Win11 machine. Here is how I resolved it:
ISSUE: The overlay icons were not displaying
RESOLUTION:
1) Changed the folder/file ownership to the current logged in owner. For some reason, the inherited group ownership will not work. Used the "takeown" command to change the ownership.
2) Changed the "Status Cache" setting to "Shell Extended"
The issue can arise after a "git clone" of a repository and the new created folder/files will not be owned by current user, rather, some group.
Regards