If I could alphabetize my folders, I'd put a blank space as the first character in each so they'd all sort BEFORE the nonsense folders I can't delete. Maybe that's why MS is fighting this fix.
This is simple rudeness. Every time Microsoft messes with the options I have set or adds new features, there should be a full screen warning to the effect of:
"Here's how we messed up everything you worked so hard to create:
1 - xxxxx - turn on____ revert to what I had___"
Perhaps the millennials doing the programming were never taught proper capitalization rules in their English classes. I can't believe the alternative, that the field was reduced from 8 bits to 7 bits, as in the old days of ASCII decades ago. I have PST folders with the names of REAL People and REAL businesses. I'm not e.e.cummings (look him up); proper names should be used and displayed properly.
I've been asking for this since Windows Phone 7 was introduced. I don't EVER want my business Contacts (what you now call "People") exposed in the cloud. Under Windows Mobile I just plugged my phone to my PC via USB cable and I had the most current data in both devices.
I've tried your new method, creating an additional database on my Microsoft account, then downloading the add-in for Outlook on my desktop and copying ALL my Contacts to a new folder. The result is that neither the cloud, nor the phone has the File As field so all my contacts are not sorted, and a lot of data is lost.
This is an incredible move backwards, and it is now more than five years that you haven't restored the capability. Not even in Windows Mobile 10.