It seems Windows 11 has inherited an issue from Windows 10. Users are reporting that the operating system is creating hundreds to thousands of empty folders in the System32 directory.
The folders are believed to be created by the Provisioning Package Runtime Processing tool, filename ProvTool.exe, and can be deleted without causing any issue.
The issue has been around since 2019 on Windows 10, and appears to have made the jump to Windows 11.
Besides the housekeeping issue, the bug does not appear to cause any problems on your system. If you want to check if your PC is afflicted, and want to clean a bit of house, you can check yourself at C:\Windows\System32\config\systemprofile\AppData\Local .