I have a file named new.txt. Using GUI I can create a shortcut, for example, "new.lnk". When I click on "new.lnk" file, Notepad is opened with the contents of "new.txt" file. When I create the shortcut using PowerShell
NEW-ITEM -TYPE SYMBOLICLINK -TARGET "NEW.TXT" "NEW.LNK"
I can see the contents of the file using
CAT "NEW.LNK"
but the shortcut file is not working in the GUI: it does nothing.
I expect to see the contents in Notepad editor. The properties of the file created using GUI and PowerShell are the same, except for "Start in" information: blank when the short cut is created using PowerShell and with the path file directory when using GUI.
Symbolic link (symlink) is not the same as Windows shortcut. A symbolic link is created on file system level - it says "here's a file with such filename, but the content is actually in this other file". It's size is 0 Bytes, as it just points to other file. It would be more proper to name the file "new-linked.txt" instead of "new.lnk".
A shortcut ".lnk" is a separate file that is interpreted by Windows shell. It contains a path to the target file (among other additional properties). If you create shortcut from UI and then try cat my.lnk, you'll see the content of the shortcut file itself, not the target file.
For creating a Windows shortcut from Powershell, see How to create a shortcut using PowerShell.