Read Only (Padlock Icon) files - OFDB 17.3.6743.1212

I think this issue must somehow be related to a bug in Onedrive. I have document libraries which were syncing fine and I was able to edit synched files with the previous ODFB (groove.exe). After installing the new ODFB Preview (onedrive.exe) I noticed the better part of my libraries were synced as Read Only.

If I remove versioning altogether for the document libraries it works... but I need versioning so that is not an option.

However, having fiddled around with the settings for my document libraries for a while I noticed that I can use Versioning and make them sync as editable content. What I did first of all was disabling "Require content approval for submitted items?" and "Require documents to be checked out before they can be edited?".

The only setting I've enabled in Versioning Settings is "Create major and minor (draft) versions". By setting the Draft Item Security to "Anyone user who can read items" the library syncs fine and I'm able to edit content synched to my local PC via ODFB.

BUT, every time I change the Draft Item Security setting to anything except "Anyone user who can read items" (e.g. "Only users who can edit items") all content is synched as Read Only again!

Has anyone else experienced this?

I'm not using any Meta Data settings or mandatory columns. The document libraries I've tested this approach on are basic, straight out of the box Sharepoint document libraries on Sharepoint Online. I'm using Office 2016 too btw.