A couple of posters asked about trash support. First though, I want to provide a little bit of context about why you see what you see in the product today.
OneDrive on macOS has never fully had proper trash support for Files On-Demand because of how dataless files work. In the previous version of Files On-Demand, the way we implemented this was to first download trashed files to your OneDrive, and then put them in the trash. This created a weird situation where in order to free up space and delete things, you first had to fill it up before you could put it in the trash. We received a lot of feedback from a wide variety of customers about this problem over the years.
For the first version of our File Provider implementation, we made the decision to immediately delete files locally, and make our online recycle bin more discoverable. That latter change is rolling out now and you'll soon see a button (if you don't already) when you click the OneDrive icon that will take you directly to the online recycle bin. This approach ensures that we aren't unnecessarily consuming disk space and network bandwidth when you go to delete files, but also ensures you can find your cloud recycle bin more easily.
Properly supporting the trash in OneDrive on macOS is very much on our radar, but I don't have a timeline to share for when it will be available. Our goal is to eventually bring the same trash behavior we have on Windows to macOS, where dataless files are deleted immediately and non-dataless files end up in the local trash.
Jack