PST migration to Exchange online

Because you will need to create a new mail profile in Outlook, a new OST will be generated which contains a cached copy of the mailbox. The size of the OST is determined by how much mail is cached, and this can be controlled (you don't need to cache the whole mailbox). Using online mode in Outlook when connecting to a mailbox in Exchange Online will be a painful experience for users due to the lag when accessing message items over the internet, especially over a slow link, so I wouldn't recommend it. I would recommend configuring a small cache for each user initially (maybe 1 month or less) then expand it post migration when things settle down.