This post is nothing related to servers. I post that since I couldn't find anything on the internet about this issue. This "OneDrive Can't Add Your Folder" spent me quite a while to figure it out. I only found an article talks about IRM after I figured the issue out. So I think it's maybe valuable to document that. I re-installed the testing machine by different OS versions several times. It's just happened suddenly. My OneDrive cannot sync any files. I upgraded the client to the latest version but no luck.
The error message I got initially was:
We can't sync your OneDrive - xxx
Following these steps to fix the problem:
1. Go to portal.microsoft.com/OneDrive, click the Settings icon in the top-right, then click "Site settings".
2. Under "Site Administration", click "Site libraries and lists".
3. Click "Customise Documents".
4. Click "Information Rights Management" and clear the checkbox.
Then I upgraded OneDrive client, re-installed office, re-installed OS, and enabled full permission to my O365 account on OneDrive folders. I also tracked my OneDrive posting data by a nice free tool Fiddler. There are error keywords related to "IRM" that don't support in Fiddler when I connected OneDrive to my O365 account. Then I uninstalled OneDrive and installed latest version of it. Now I got following error message when sign in my O365 account in OneDrive.
Sorry, OneDrive can't add your folder right now
Please contact support.
I eventually figured it out when I was troubleshooting other software issues. The reason is the "Information Rights Management" (IRM) feature was enabled on my O365 account. It restricts file synchronization on unauthorized computers when I log in to a computer with my domain account (it's also the O365 account). I checked my computer domain account in "Active Directory Users and Computers". I noticed that the "Managed By" of the computer was blank. The OneDrive issue resolved as soon as I set it to my domain account.
Here is a good article to explain what's IRM and how it affects OneDrive.