I’m having same issue.
I have a folder that I need deleted from Sync, but keeps reappearing.
I closed all my other instances of Obsidian out, I cleared out my snapshots and history, have tried both deleting the files from within file directory and deleting it from Obsidian. I’ve tried to turn sync off and then on, tried everything I could think of in different combinations. I really need to figure this out because I can’t mix these files with my other project.
If you rename the folder, does the old folder reappear still? Can you post what the sync log shows is happening in this instance?