I just hit this bug (in Windows 11 since no-one has yet updated this thread with the fact that it still exists there). Thankfully, the workaround presented as the solution not only worked, but also highlighted to me that in selecting the option "New or existing" that I thought I wanted, I'd actually chosen wrongly since "New" is the correct option to choose to allow the choice of a new or existing file with a warning prompt to overwrite an existing file. So double-thanks (and kudos) to the original poster (who is probably long-gone in the intervening decade). This behaviour could be more clearly described in the documentation (although in fairness I doubt I would have read it closely enough anyway). Perhaps instead of "New—The user only can enter the name of a new file or folder," which is not true, it could better be labelled "New (warn on existing)". Either way a good outcome thanks to this forum.
