OneDrive Files On-Demand copying files to local folder

All, I have a Python script that copies files from a network folder to my server's OneDrive folder and OneDrive is set up to save disk space by using Files On-Demand.

So, does that mean any files that I copy to that folder will not take up space on my server's hard drive?

Because currently, that is not working?

What are some of the possible issues going on with this. I am copying quite a large number of files.