There are a few things that have to be done before this will work.
- First your organization has to enable external sharing and enable
anonymous sharing within sites.
- Next they must ensure that the site where your document lives (MySite or SharePoint site), are enabled for "Share Links, and Invitations". If it's only configured for "Share Links" then external users must sign in with a Microsoft ID to access the document.
You can see here - for me my sites (OneDrive for Business sites) don't allow for anonymous sharing.
but I have another site where we allow for posting documents that can be allowed anonymously (I also have a rule that deletes all documents here every 7 days).
Also - be sure when you select your Guest link it states "View or Edit - no sign in required"
In regards to Sharing at the folder level - currently anonymous links are not available. If you share the Link, all users accessing it must logon with a Microsoft Account.
I do believe in the past there was mention of Microsoft rolling this feature out - but I don't see it on the RoadMap any longer.