Most likely Microsoft re-wrote OneDrive yet again in Windows 11, broke compatibility with other things, and nobody reported it to them during the beta (or they ignored the reports), so it wasn't fixed before release.
We'll add it to our list to look at and see if we can find a workaround. I'd advise against jumping on Windows 11 this early unless you have a compelling reason to.
Edit: Thinking about it, they've probably dropped the old OneDrive context menu entirely and replaced it with the one that works with File Explorer's new context menu type. (The one that hides most items and takes several seconds to display a menu despite the menu being simplified. It's a trainwreck, this OS update.) We may need to add support for that style of menu item (if it's possible outside of File Explorer; they've done things in the past that wouldn't work in other processes) or a way to simply display the shell context menu itself, but it may also depend on how/whether other developers adopt it, and whether Microsoft backtrack on it (as the new menu implementation is being widely criticised, aside from the visual design which people seem to like)