I am able to reproduce this. @supernova874, what terminals do you have installed? I'm going to bet its Kitty.
If so, and perhaps even if it isn't, you should be able to fix this by opening the file manager, right clicking on any folder, and open it with the file manager. That will set the system to open them with the file manager. Kitty sets itself as the default application for certain file types, one of them being directories.