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This shortcut icon will not show if ICO file is on network drive. The quick way to fix is, copy the ico file from network drive to local drive like c:\temp, then set again the ICO file on shortcut while pointing to local ico file.
The other way is change GPO setting, the details is
Computer Configuration -> Administrative Templates -> Windows Components -> File Explorer
Setting: Allow the use of remote paths in file shortcut icons
Alternatively, set it over registry, details below.
Open Registry Editor
Navigate to HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\Explorer
Create a new DWORD key Value Name EnableShellShortcutIconRemotePath Value Type REG_DWORD Enabled Value 1 Disabled Value 0
Refer – https://www.reddit.com/r/sysadmin/comments/11wqxwr/windows_11_not_displaying_icon_images_for/
