So for me it was a kludgy entry and a surprise but in the end it works and some folks think their stuff is gone but it's not.
My experience:
1. I use pathfinder instead of finder and I noticed that my one drive paths (I have both 365 family and a company one drive) were buried deep in the "hidden" location. See my post up above for that.
2. I noticed that on demand was my only option.
3. I opened the sync root folders and the the hidden ones and confirmed that a change in one mirrored a change in the other.
4. I "pinned" all the top folders I wanted to keep on my computer to match basically what I had already been syncing with on demand off previous to this change.
5. I immediately realized that, like others, that most of the files in my sync root folder had both the "keep on computer" icon and ALSO a cloud icon.
6. I learned that having both icons meant that finder was reporting both that the file was available on demand AND offline.
7. If I tried to preview a file with both icons it would not work unless I actually opened the file which seem to look like it was downloading the file. After that the cloud icon for the file would disappear and I could easily preview the file with a space bar press.
8. However, in order to confirm that what was really happening was that the data of file was being transferred from the "hidden" cache to the sync root folder, I disconnected from the internet and confirmed that the "download" activity was just that, happening locally, not really downloading.
9. However it seemed crazy that I could not force a batch update. However on smart writer above learned and shared that one need only click the cloud icon next to a file or folder to cause the sync to happen. So I clicked the clouds on all my top folders and it took a long time, like Hours, but as of now ALL my files have no cloud icon and just have the "pinned" offline icon and easlily are previewable.
10. Next I learned that that if I tried to delete a file from the sync root folder, that macOS would warn me that the deletion would be permanent. i.e. not go to the recycle bin and not be command Z undoable. This is what happens with external drives. So basically macOS thinks the sync root folder is external and bypasses the recycle bin even though the file is really local in either the sync root or the hidden cache folder (hard to tell which). Such is NO GOOD.
11. I discovered using pathfinder that pathfinder doesn't treat the sync root folder as external and allows a delate as normal without a prompt and allows a command z undo. Pathfinder doesn't have all the fancy one drive right click choices like "share" (handy), "always keep on this device," "show online," and "free up space" like finder has, but those are not really that necessary for me although the share choice can save some time going to a browser to do so.
12.So I can confirm all my files are in sync and local as before with finder, but use pathfinder to zoom along as normal.
13. So now it's all working. It was definitely a drag and lost me hours to do all this, but it works as before and I guess has some advantages because now I can mix and match my local and on demand experience.