This update is a complete mess. Today I updated my macOS to 12.3, and found that on-demand I previously enabled not working, onedrive is downloading all the files in my cloud to local disk, which is more than 5 TB, far beyond my MacBook Pro 14 disk capacity. Later I figured out that you change the sync system, so I updated my onedrive for mac.
BUT! since you changed the root location of the onedrive file, although many of the files is in my local disk, it shows a cloud icon, thus I could not distinguish which file is in my local disk and which file is on the cloud. What is more ridiculous, is when I click the file, onedrive is download the file again from cloud, but it is actually already in my local disk, some of file is uploaded from my local disk.
Disaster.