The new File Explorer features an updated user interface that matches the visuals of Windows 11 with rounded corners, new iconography, and redesigned default folders (Desktop, Documents, Downloads, Pictures, etc.). Also, since the ribbon menu has been removed in favor of a new command bar that includes all the common actions and new menus to sort items and access different settings, including the ability to enable compact view and show hidden items.
In this new version, you are also getting a new (right-click) context menu design using rounded corners, semi-transparent materials, and new icons for the different actions, including Cut, Paste, Copy, etc. The new context menu is limited, and since many apps still don't support this new menu, Microsoft has added a "Show more options" item to access the classic context menu.
Source - Windows 11: The ultimate tips guide | Windows Central