The Groove.exe based OneDrive for Business client does not support the use of # and %. This support is limited to the newer sync client (OneDrive.exe)-based which replaces the previous client for use with Office 365. The new client is often referred to as the NextGen Sync Client. You can download the latest version of OneDrive.exe at https://onedrive.live.com/about/en-us/download/.
As documented here last month we announced support for # and % across SharePoint and OneDrive and now in addition to adding support for # and % we're also increasing MAXPATH or otherwise SharePoint and OneDrive's Url path length restrictions from 256 Unicode code units to 400. This new limit section applies to the total length of the URL path to a folder or a file in SharePoint Online and/or OneDrive for Business but not to the length of any parameters. Also, these limitations apply only to un-encoded URLs, not to encoded URLs. There is no limit to encoded URLs in SharePoint Online and OneDrive for Business.
For additional information on SharePoint Url composition, refer to the details below:
The total length of a SharePoint URL equals the length of the folder or file path, including the protocol and server name and the folder or file name, plus any parameters that are included as part of the URL. The formula is as follows:
URL = protocol + server name + folder or file path + folder or file name+ parameters
Thanks!
Bill