SharePoint Online Updated Feature: Limited-Access User Permission Lockdown Mode

Microsoft is at it again: Enabling features you didnt realize you needed until after a random update is applied, that leaves you banging your head against the desk for hours trying to figure out what has changed.  So is the case with a recent feature update called Limited-Access User Permission Lockdown Mode.

If you plan on setting unique permissions on a folder within a document library in Office365/SharePoint Online, you will need to disable this site feature that Microsoft has so graciously turned on for you.

You will know this feature has been enabled if you get this message when trying to apply unique permissions to a folder:

Here is Microsoft's notification regarding this change:

And more information regarding the feature can be found here:

http://support.microsoft.com/kb/3039997