Ubuntu – Directory exists but does not exist simultaneously

As you can see from the screenshot below, the directory out both exists and doesn’t exist simultaneously

I want to recreate this directory but have no idea what to with it.

Originally, this directory was a normal directory, the only thing out-of-the-ordinary was that it was used as a volume with Docker.

Perhaps Docker interfered with the directory in some way.

Furthermore, the Ubuntu installation is within WSL2, perhaps Windows has interfered when syncing this directory.