2.24.22 UPDATE: We've been listening to your feedback, and we've made some design changes. We're releasing a new version that addresses the most common themes and makes it easier to achieve the previ...
Updated Feb 24, 2022
Version 12.0
Blog Post
I can't imagine a single user who is satisfied with losing the ability to move items to the trash. The problem is with the Finder and not OneDrive per se, as others have noted that PathFinder does trash properly from ~\Library\CloudStorage. Apple is very slow to fix this kind of thing. In the meantime, if you want a workaround, create a To Trash folder and put it in the Finder sidebar. You can move files and folders from OneDrive to the To Trash folder. Then from time to time trash all the items in the To Trash folder. Or have Hazel (or a macro program) do it automatically. You lose the Put Back capability with this solution, and you lose the ability to use Cmd-Delete*, but it's better than permanently deleting the file.
*I tried to use Keyboard Maestro to trash the file using Cmd-Delete, or at least to move the file to the To Trash folder I described above, but it just beeps at me in either case. If anyone gets this to work please post here.