Interesting, our experiences are different here. I suspect it's because I installed Windows 11 (23H2) using a local account using the OOBE bypass (not because I particularly hate the Microsoft account thing, but because this machine uses an external WiFi adapter and requires drivers in order to work, so I could not have done it even if I wanted to). The drivers are actually included on the device, but there's not a clear way to accomplish a driver installation while in the captive OOBE, even given the ability to launch a command line.
I did later connect my Microsoft account. In my installation the OneDrive folder is empty and the entries in Explorer map to the normal places (C:\Users\X\Pictures etc). If I open one of the default folders, it does show a "Start backup" entry in the address bar that is referring to OneDrive, though. If I open the OneDrive folder, it asks me to sign in (entering password) and set it up-- which is funny, because the Windows user is signed in using a Microsoft account already- so seems like they haven't connected those dots properly yet. In theory this might be their way of implementing a security check for uploading all your files, but if so it's an awkward way to do it.
> Additionally, some programs still seem to want to use the OneDrive folder by default, like I think Office programs still do their best to use them.
If I remember correctly, there is an API that programs can use to locate common folder locations for users (such as Documents, Pictures, etc). My guess is that your account still points to the C:\Users\X\OneDrive\Pictures instead of C:\Users\X\Pictures. If you could adjust those directly (maybe in the registry?), I would imagine that it will work correctly in these programs, especially since I doubt those programs would break on my setup, where there is no OneDrive subfolders (though I don't use Office so I can't check). And in case you wonder if there really are no subfolders in OneDrive since I can't open it in Explorer without signing into it- it shows nothing when viewed via PowerShell.