On January 26 th , we released a new version of OneDrive sync (22.002) on macOS 12.1+ with an updated Files On-Demand experience. Prior to this release, OneDrive used a kernel extension for Files On-...
Updated Mar 01, 2022
Version 4.0
Blog Post
YaYaTurre if you’ve set OneDrive to an external drive then you cannot get rid of the cloud icon even if the file is checkmarked, and you will likely have it duplicated both on the external drive and in the library folder on your system drive that OneDrive uses as cache. Until they change the implementation there isn’t a way to fix this.
if other cloud providers demonstrate that they can implement their services without the always on demand thing and on an external drive as actual files instead of symlinks to a cache that deletes data without the user’s say so, then I guess it will show that this situation can’t be blamed on Apple but was a decision on Microsoft ‘s part all along. Time will tell and soon, macOS 12.3 is here, let’s see what Dropbox has done.