Does deleting unique permissions on a folder reset its subfolders?

No. Each item with broken inheritance is reset individually. Resetting a parent folder does not touch children that have their own unique permissions.

How do I reset permissions on all folders in a SharePoint library?

Enumerate items with HasUniqueRoleAssignments true and call reset on each (Set-PnPFolderPermission / Set-PnPListItemPermission -InheritPermissions in PnP PowerShell). Exclude the items that should keep unique permissions before running it.

Why can't I break or reset inheritance on a large SharePoint list?

Lists and libraries with more than 100,000 items cannot have inheritance broken or re-inherited at the list level. Item-level resets still work; reduce the item count or reset per folder.

How do I find all folders with unique permissions in SharePoint?

Library settings → Permissions → Show items with unique permissions lists them for one library. PowerShell can walk every item across all libraries and report HasUniqueRoleAssignments.

Reset permission inheritance on every subfolder at once (and keep the exceptions you actually want)

The UI resets one folder at a time and nothing below it. PowerShell can do a whole tree — but it will also flatten the two folders that were broken on purpose. Here is the script with an exclusion list, and the 100,000-item wall.

"Delete unique permissions" in the browser is one folder, and the dialog's fine print is accurate: subfolders that have their own permissions keep them. On a library with hundreds of broken folders it is a week of clicking. PowerShell does the tree in minutes — which is exactly the problem, because two of those folders are broken on purpose.

Step 1: inventory, not action

Connect-PnPOnline -Url https://contoso.sharepoint.com/sites/Projects -Interactive
$lib = 'Documents'

$broken = Get-PnPListItem -List $lib -PageSize 2000 -Fields FileRef,FileLeafRef |
  Where-Object { Get-PnPProperty -ClientObject $_ -Property HasUniqueRoleAssignments } |
  Select-Object Id, @{n='Type';e={$_.FileSystemObjectType}}, @{n='Path';e={$_['FileRef']}}

"$($broken.Count) items with unique permissions"
$broken | Export-Csv .\broken-inheritance.csv -NoTypeInformation

This is one call per item, so on a 50,000-item library expect it to run for a while. It is also the list you send to the owner. Ask them one question: which of these are supposed to be different? Those go in the exclusion list.

Step 2: know who loses access

Before resetting anything, run the who-loses-access comparison over the list. Guests and shared-with users on those folders lose access the moment you reset; the owner should see those names first.

Step 3: reset

One folder at a time, the command is:

Set-PnPFolderPermission -List $lib -Identity 'Client X' -InheritPermissions

Looping it over the inventory is a two-line change. Looping it safely is not: you need the exclusion list applied as a path prefix so a confidential folder's subfolders are protected too, you need each item's who-loses-access list exported before the loop runs, and you need to notice when a reset silently fails on a checked-out or locked item, because the loop will not stop on its own. That is the 80% / 20% line for this job.

Step 4: verify

Re-run the inventory. The count should equal the number of kept items. Anything still showing unique permissions was checked out, locked, or failed silently.

The 100,000-item wall

Lists and libraries over 100,000 items cannot break or re-inherit permissions at the list level. Item-level resets still work. If you hit it, do not try the library setting; work through folders. The Tech Community thread on this ends with the same conclusion: below the threshold by splitting or archiving, or accept per-folder operations.

Doing this with a safety catch

The three failure modes are: resetting a folder that was broken on purpose, resetting before anyone saw who loses access, and not noticing when a reset silently failed. Inheritance365 addresses each: an exclusion list you build from the sweep results, a per-item impact simulation that must be exported before the execute button enables, and a post-write check on every item it resets. It only ever calls resetroleinheritance; it never grants or removes anything else.