Yes, I confirm I am locate inside EU.
I just sent you my email address, thank you for your work and help.

I was testing this yesterday using multiple accounts, both old and new, both with two-factor authentication on and off. All was working.
And suddenly, today, I'm getting the same symptoms as mr_bartleboom for all of them.
Something must have changed overnight. Seeing lot of differences between how the server was responding yesterday and how it is today, my accounts must have been migrated to some kind of new server. Seeing new EU-related headers, I wonder if this is about EU Data Residency regulation. Aren't you all located in EU? I also wonder, if migration might have been triggered by my tests earlier (as I did login to my OneDrive in web browser the first time after months, if not years).

Anyway, I've made basic improvements to make WinSCP compatible with the new server/interface.
But I at least know about one more problem with creating new folders – to be solved the next week.

Issue 2321 – Compatibility with new OneDrive WebDAV interface

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@mr_bartleboom: Can you send me an email, so I can send you back a development version of WinSCP for testing? Please include a link back to this topic in your email. Also note in this topic that you have sent the email. Thanks.

@Guest: Ok, so are you connecting to your private OneDrive?
What are your Security preferences?
https://account.live.com/proofs/manage/additional

@martin: I'm a bit confused..my outlook.com account is a private account (free) and I don't have idea which is my "YourOrganization"-admin... any suggestion?

@mr_bartleboom: The server returns:

Access denied. Before opening files in this location you must first browse to the web site and select the option to login automatically

This page:
Microsoft Error - Access denied. Before opening files in this location, you must first browse to the web site and select the option to login automatically.
suggests:

Here is the fix that worked for me:

Browse to https://"YourOrganization"-admin.sharepoint.com/

Policies > Access Control
Change the "Apps that don't use modern authentication" to Allow Access

Dear @Martin
thank you for your help, here enclosed the 2 logs.

@mr_bartleboom: Please post log on normal logging level.
And also the log from the GUI for the "ignored Wlid1.1 challenge".

@martin
Sorry for the long time passed, yes my bad I uploaded the wrong log file.
I try to explain better, I got the error "Could not authenticate to server: ignored Wlid1.1 challenge" using the GUI interface OR the .NET library. After the error, navigating the folders I got a double root CID folder, also my sub folder AC_UPLOAD duplicate it self inside. If I try to delete/navigate the duplicate folders I got "Not found 404".
Instead, using the command line for uploading a file I get a "403 Forbidden", see attached log.
Many thanks for your help and your work.

@mr_bartleboom: I do not see any "Could not authenticate to server: ignored Wlid1.1 challenge" in your log. Are you sure you have posted the right log?

I got the same error after months (!!) of successfully uploads using .net.
If I access using the GUI now the root directory shows a subdirectory with the same name (CID).
Also inside the directory where I copied to several times now there is a subdirectory with the same name. If I try to delete the directory it says access forbidden.
Attached the logs

@jdProm: I've sent the debug build to you too.

@j150us: Is it regular/personal OneDrive? Or some business account? Or some Sharepoint?

I have sent you an email with a debug version of WinSCP to the address you have used to register on this forum.

I get exact same error when accessing OneDrive from WinSCP
Authentication failed.

Could not authenticate to server: ignored Wlid1.1 challenge

If I click OK all files and directories are displayed except for parent directory name appears among other directories and there is no parent directory icon with an arrow on it and two dots to navigate to parent directory.
If I click parent directory name that appears among the names of its subdirectories I get error message:

Error changing directory to [parent directory name].