At the very least, it should be masking the mode with 07777 to get rid of the file type.

Well, technically it is. It is masking with octal 022, which is bit 1 and bit 4 (counting from zero) so no other bits are considered. Or in other words "is the world-write bit set?" or "is the group-write bit set?" and if either is set, then the result is true after the bitwise AND operator.

It might be related to the "Everyone" user in Windows? Windows permissions inherit from parent, so I think you'd have to add a new permission for Everyone that explicitly sets "no permission". Disclaimer: I haven't used windows permissions in several years.