You are running into 494679 – Dolphin populates "Create new" menu with the content of home dir more details in Dolphin "Create New" context menu is just showing contents of my Home Directory - #5 by solarisfire
This is fixed in KDE Frameworks 6.8, if you update this should be fixed.
That’s btrfs magic, copy is “free”/instant, it is implicitely a sort of symlink that can diverge independently.
And KDE software will use reference copy by default when the filesystem supports it.
Anyway, I put a “Create folder” button in the dolphin toolbar to recover that function.
You can also use the shortcut Ctrl+Shift+N.