It is completely understandable to be perplexed by this! Your iPod Shuffle plays the music perfectly because the audio files are physically intact on its storage. However, Windows 11 cannot see them due to hidden system folders, file renaming, or drive formatting issues.
The LOST.DIR folder you see is just a directory where operating systems place recovered files after an improper disconnection. It does not contain your actual music library.
Try this
Show hidden items: Open your iPod drive in File Explorer. Click View at the top menu, hover over Show, and check Hidden items.
Locate the folder: Look for a newly revealed folder named iPod_Control. Open it, and navigate to the Musicsubfolder.
Copy the files: You will see folders named F00, F01, etc. Copy these folders directly to your laptop's local hard drive.
Restore the names: Import these copied files into a media player like iTunes, The player will read the embedded metadata (ID3 tags) and instantly restore the correct song titles and artist names.