Thumbs.db is causing conflicts

[TMProjection]

Hey all im a bit confused
So since i been messing around with thumbnails, cache, and codecs (as ive been setting up a new desktop)
I seem to notice new "Thumbs.db" files, these are hidden files and seem to be used by xyplorer from my understanding, because when i try to rename a folder that has that file in it, i often get conflicts saying i cant delete the folder as its being used, but if i close and attempt with windows explorer its fine

my confusion is coming from the cache, i thought the thumbnail cache was stored in:
Thumbnails\

[admin]

"Thumbs.db" files are created by the shell (image factory). Somewhat erratic, but here and there they pop up. They are thumbnail caches so they are useful. However, there seems to be a way to turn them off via gpedit.msc (did not try):