Reproduction steps:
1. Open the attached “FolderNavigation.zip” project
2. Open the "Navigation" Scene
3. Make sure the current navigation in Project Window is in the Root folder of Assets
4. Open the "Test" folder
5. Drag the "Cube" Prefab into the Scene
6. Press "CTRL+Z" to undo GameObject placement
7. Observe the Project Window

Expected result: Project tab remains in the "Test" folder
Actual result: Project tab has navigated back to the Assets folder

Reproducible with: 2022.3.56f1, 6000.0.35f1, 6000.1.0b2

Reproducible on: Windows 11 (24H2)
Not reproducible on: No other environment tested