Hello,
Thank you for posting here.
According to your description, as for the GPO to restrict users to access disk C:\, we could have a check whether this GPO is what we want.
User Configuration > Administrative Templates > Windows Components > Windows Explorer > Prevent access to drives from My Computer. It is set to "Enabled" with the option "Restrict C drive only".
This similar case is also discussed on our TechNet forum. Below is the link:
https://social.technet.microsoft.com/Forums/en-US/f0e747b9-8952-46aa-ac4d-0d9ad341f4c8/how-to-restrict-users-to-access-windows-folder-on-local-drive-quotcquot?forum=winserverGP
For any question, please feel free to contact us.
Best regards,
Hannah Xiong