Esme Povirk (@madewokherd) commented about dlls/comdlg32/itemdlg.c:
if (!hwnd) ERR("Failed to update navbar.\n"); else
{
IShellView *shellview;
HWND shellview_hwnd;
SendMessageW(hwnd, NBM_SETPIDL, 0, (LPARAM)pidlFolder);
/* keep focus on the explorer browser to be able to Backspace multiple times */
hr = IExplorerBrowser_GetCurrentView(This->peb, &IID_IShellView, (void**)&shellview);
if (SUCCEEDED(hr))
hr = IShellView_GetWindow(shellview, &shellview_hwnd);
if (SUCCEEDED(hr))
SetFocus(shellview_hwnd);
I don't think this approach is going to work out. You could navigate using the keyboard from the filename edit box, in which case focus should remain there. Duplicating all the keyboard shortcuts inside each control isn't going to scale.
My suggestion would be to restore the focus to whatever it was previously when the button handles click messages.