Check your inotify maximums - this is the system which monitors directory contents and notifies applications of changes. These maximums used to be pretty low, but should be high enough for most users these days. Do you tend to work with multiple directories containing lots of files?

See what you get when you run these two commands:

sysctl fs.inotify.max_user_watches
sysctl fs.inotify.max_user_instances

You can increase them temporarily like so and see if it helps:

sudo sysctl -w fs.inotify.max_user_watches=524288
sudo sysctl -w fs.inotify.max_user_instances=1024

If it does help, add to /etc/sysctl.conf (or a file in /etc/sysctl.d/).

It works on mine out of the box so it's probably related to something further down the stack. I probably can't help but what distro?

What distro are you using?

Debian quite literally calls the package “dolphin” so running this command will purge it and reinstall it;

sudo apt purge dolphin; sudo apt install dolphin -y

I know the Windows version has issues updating folders live, but on my Debian machine have not encountered such issue.

Alternatively you can purge KDE itself and reinstall everything.

sudo apt purge *kde*; sudo apt install kde-full kde-standard kde-plasma-desktop task-kde-desktop sddm -y