The user wants to limit access to a folder that resides inside a shared drive. The user wants to keep normal access for the shared drive, and only restrict a few folders for certain people that have access to the shared drive.
- Move the contents of the folder in the shared drive to a folder in their own My Drive.
- Right click on the folder in their My Drive, and select Add shortcut to Drive.
- Move the shortcut into the original location of the folder inside the shared drive.
They can treat the folder as a regular folder, and they can manage access to the folder as such.
It is expected behavior, sharing access to a shared drive gives that user access to all the content inside the shared drive (depending on their assigned permissions).