This update just forced itself on my Mac. I had "Turn on Files-On-Demand" disabled. This update turned it back on, deleted my local files, and downloaded on-line files only. Now the new software does not have the ability to turn off Files-On-Demand. Even worse, the new software has removed all direct access to files/folders.
This change just made it impossible to move files or folders out of OneDrive. Even if files/folders are marked as "Always Keep on this Device" they are not accessible outside of an application. There is no way in Finder to copy any of your folders or files and drag them out. After receiving the new downgrade, I marked all files and folders as "Always keep on my device." After several hours of downloading, OneDrive stated they were downloaded - however, if you click on any file or folder, it still shows 0mb in size and there is no direct file path to access a document. There is now two icons - one that shows it is downloaded and one that shows it is in the cloud. All of the downloaded files are in the Cache folder, that is hidden and inaccessible, and the files shown have no data associated with them and show 0kb with no path.
Microsoft has essentially locked up all files / folders in a private location and a user has to ask permission to retrieve them by an application MS approves.
Even using the symlink option as noted above, there is only direct file access to the Sync root and no direct access to any file or folder itself. AGAIN, there is NO direct access to any file or folder any more except for files that have been recently opened -- even with "Always keep on my device" is selected. All users are LOCKED out of their own files.
There is ZERO user advantage to this upgrade. This upgrade did one thing, and one thing only, make MS the owner of your documents. As stated above, your files are cached in a "Hidden Location" and no user can have direct access any longer.
BACK UP your files now. OneDrive is no longer a backup location. Any users forfeits the right to own a file using this tool.