Set-ACL on folder hangs, then times out PS 7.2.2 and 7.2.3

Prerequisites

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[X] Make sure you are able to repro it on the latest released version
[X] Search the existing issues.
[X] Refer to the FAQ.
[X] Refer to Differences between Windows PowerShell 5.1 and PowerShell.

Steps to reproduce

Moving a few million files and folders from SharePoint to NTFS. The code works perfectly under PS 5.1, but other (PnP) commands only worked or worked better under PowerShell 7. While running the script I noticed pauses in the script execution. I thought it was O365 throttling, turns out whenever I created a new folder and then set ownership via Set-ACL (note comments before and after Set-ACL), the process would hang for approx. 3 minutes then move on without error. Generally, the folder ownership was never updated. Again this code works flawlessly under PS 5.1. 20 new folders is one hours of wait time.

        if (!(Test-Path -literalpath $destinationfolder)) {
            Write-Host "Adding Folder: " $destinationfolder -ForegroundColor Green -BackgroundColor Black
            $dest = New-Item -Path $destinationfolder -type directory -ErrorAction SilentlyContinue -Force
            $acl = Get-Acl -LiteralPath $destinationfolder
            $acl.SetOwner([System.Security.Principal.NTAccount] "Domain Admins")
            #"Before Set-ACL"
            Set-Acl -LiteralPath $destinationfolder -AclObject $acl
            #"After Set-ACL"
            $global:folders += 1 
            Start-Sleep -m 250
        }
        else {
            Write-Host "Skipping Folder $destinationfolder" -ForegroundColor White -BackgroundColor Black
        }

Expected behavior

The ACL is swiftly updated or an error is returned

Actual behavior

Set-ACL hangs for 3 minutes then times out without error.

Error details

No error

Environment data

PS 7.2.3, .Net 6.0.4 runtime

Server 2016, fully patched.

Visuals

there will be no error - it will time out and the script will continue.

PowerShell / PowerShell