Just to let you know I had a very similar issue with OneDrive over the weekend. Link below. I also saw folder structure but no files/notes & I may have also seen flashes of previews. As we are on different clouds… Could this be a fault in the latest Obsidian version… 1.28 ?
Not sure how to log an issues & work prevents me getting more detailed but maybe we should both see if we can escalate is as a possible bug…