folder_create · M365 MCP: Risk & Policy

WHAT IT DOES

What folder_create does on M365

AI agents use folder_create to create or update resources in M365 — usually the action step of a workflow, after the agent has gathered context. Every call changes real data in your M365 environment.

WHY IT NEEDS A POLICY

Why folder_create needs a policy

This tool creates (Write category) a new folder, which is a reversible modification. Severity is medium because misuse could create numerous folders consuming storage quotas or cluttering file structures, but the action is undoable.

From the tool's definition Tool name 'folder_create' indicates creation of a new folder within Microsoft 365 services (likely OneDrive or email folders based on server context). The server manages OneDrive, Outlook, and similar services.

Attacks that exploit this kind of access

Recommended rule Ready

Verdict

folder_create Rate-limited

folder_create stays usable, but capped — an agent stuck in a loop can't make hundreds of changes a minute. Everything else on the server is denied unless you say otherwise.

View as policy code

policy.json

{
  "version": "1",
  "default": "deny",
  "tools": {
    "folder_create": {
      "limits": [
        {
          "counter": "folder_create_rate",
          "window": "minute",
          "max": 30,
          "scope": "grant"
        }
      ]
    }
  }
}

LIMIT THIS TOOL →

Instant setup, no code required.

PolicyLayer is an MCP gateway: every tool call is checked against your rule before it reaches M365, so you can run agents against it safely.

FAQ

Questions about folder_create

What does the folder_create tool do? +

folder_create. It is categorised as a Write tool in the M365 MCP Server, which means it can create or modify data. Consider rate limits to prevent runaway writes.

How do I enforce a policy on folder_create? +

Register the M365 MCP server in PolicyLayer and add a rule for folder_create: allow, deny, rate-limit, or require approval. Point your MCP client at the PolicyLayer proxy URL and the rule is enforced on every call, before it reaches M365. Nothing to install.

What risk level is folder_create? +

folder_create is a Write tool with medium risk. Write tools should be rate-limited to prevent accidental bulk modifications.

Can I rate-limit folder_create? +

Yes. Add a rate_limit block to the folder_create rule in your PolicyLayer policy. For example, setting max: 10 and window: 60 limits the tool to 10 calls per minute. Rate limits are tracked per agent session and reset automatically.

How do I block folder_create completely? +

Set action: deny in the PolicyLayer policy for folder_create. The AI agent will receive a policy violation error and cannot call the tool. You can also include a reason field to explain why the tool is blocked.

What MCP server provides folder_create? +

folder_create is provided by the M365 MCP server (robin-collins/m365-mcp). PolicyLayer sits as a proxy in front of this server to enforce policies before tool calls reach the server.