The vault creation process never gets to the point where Sync options can be edited, so if the issue is with the Sync plugin, I don’t know how to resolve it. But I think the Sync plugin is turned off by default when creating a new vault.
Going to repost this in the Bug reports forum.
Edit: Reported here: [Windows 10] Cannot open the Documents folder or user profile folder as a vault - Bug reports - Obsidian Forum