The bug referenced at Folding applied on code block lines starting with "#" still exists.
Obsidian will count lines starting with # within code blocks as a fold point, even though they shouldn’t be. In that thread, an Obsidian team member noted that this would be fixed in 1.7.0 and then closed the thread.
I’m using 1.7.7 (AppImage) on Ubuntu 22.04 and everything in that post remains valid. I’m still experiencing the bug, and it’s still maddening as hell. The bug was not fixed and should be reopened.