I am running KDE on Fedora 41. This problem began after an update in Fedora 40 for me.
Whenever i do right click somewhere in the desktop or within Dolphin, and get into the “Create New” submenu, instead of just having “New Folder”, “New Text File” and few other items, i do see my whole “home/me” folder able to create a new “music”, “pictures” and others. Does it have a setting to change this?
This is caused by a (I believe) non-default and incorrect configuration of the file $HOME/.config/user-dirs.dirs that some distributions are doing.
This issue was also discussed this thread and this thread, and has been reported in this bug report. As of Dolphin 24.08.02, there’s a workaround that will ignore the misconfiguration. I think it will then fallback to the original (and usually correct) default.
To fix the misconfiguration, you can go to System Settings → Session → Locations and under Templates folder set it to the Templates folder under your home (or wherever elsewhere you think it should be).
I did create a template folder in /usr/share/ as root and added the items, at least within Dolphin it began to work well, i am awaiting the system to take the new configuration. I do believe it may be the solution.
Update: after a reboot it works well and even it offers me to create whatever i have in /usr/share/templates, it’s a helpful feature of Plasma if you learn how to tweak it!