Speculation, since I don't have the relevant software:

- the Windows icon cache is dependent on the display configuration (in particular, bit depth, and maybe pixel density)

- unplugging a monitor therefore flushes the icon cache

- the relevant file is an explorer icon overlay handler (which is identified by the registry key one needs to mitigate the problem)

- therefore flushing the icon cache causes a mass refresh

- the handler is probably looking to see if some True Image process is running †

- maybe it needs that to show different icon overlays?

- it's probably also doing that for every icon (i.e. the caching isn't happening across different icons, at least when the cache is flushed)

† in hind sight, this is better done via a named pipe or mutex or something

(Edit: added line breaks)

Further speculation: there's something that's working in n² time