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Updated Feb 24, 2022
Version 12.0
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Guys, this information will be really useful to you who have MacOS and want to use Onedrive on external (thus removable) drives!
Microsoft does not explain or describe anything regarding this crucial matter, probably because they do not care about Mac-Users. I will tell you how you can use OneDrive on removable drives, just as intended.
You can use Onedrive on external/removable drives that are formatted with ExFat, MacOsJournaled (NOT case sensitive), APFS (NOT case sensitive). However, there are differences on how Onedrive operates with them.
1.) When using ExFat, Onedrive will constantly check for changes in order to sync files, it will never stop and drain CPU resources as well as consume more electricity.
2.) when using APFS, Onedrive automatically switches to a "more modern" way of syncing, which is: a cloud folder will be generated on your primary drive, only files you actually use will be dowloaded (to the primary drive) and afterwards moved to an hidden folder on the external drive. I don't know who came up with this ridiculous structure, but this makes external drives useless and shortens your internal SSDs lifespan really quick, which for most of us is already short enough on an 256gb apple SSD and apple silicon swap memory on meagre 8gb of ram.
3.) MacOSJournald, that's the format I would choose!, it forces the OneDrive app to sync and maintain all data on the external drive, without using the internal drive. Furthermore, as the drive is journaled, onedrive has no need to search for changes, it only syncs when truly needed.
Now that you know which format to pick, you have to "unlink" all onedrive accounts and uninstall onedrive (preferably with a third party app).
What I did next was download an old version of the standalone onedrive app for macOS, installed it, blocked the onedrive updater with my firewall, synced my three accounts to three different external drives and afterwards updated to the newest onedrive version (unblocked the updater in my firewall).
I have the newest onedrive version on my mac mini m1 (Ventura) and I am still able to add removable drives. Sooo, downloading the old version was probably overkill. You might be fine using the newest standalone Onedrive app!