For years I was an Office 365 user and used OneDrive on my PC. I had all my data held locally on my D: drive and then synchronised into the cloud.
I've switched to Mac not long ago and set up my Mac with an external drive anticipating having all my data on there, as before. But Apple anticipate your data living in the cloud, not on the machine, so when I told OneDrive to keep all my data locally my internal drive filled up.
I found out that you can actually tell OneDrive where to cache the data and it hides it and I put it on my external. All was working. This has taken a few rounds of 'disconnecting' and/or re-setting my OneDrive and then downloading a LOT of data over my fairly slow internet link. So many rounds that I've abandoned using it for nearly all of my data. But having a set of files accessible on all my devices had some utility so I persisted and spent quite some time getting it working.
As of yesterday evening all was working fine. However some update has happened overnight to the OneDrive mechanism and now Finder shows TWO entries for OneDrive and if I look at my account via the Mac app the settings show a folder as a "disconnected location" - "This location is no longer connected to an account". I can either remove it or leave it! No option to fix it. The folder it shows I can go to and that's the one I was working on happily yesterday evening. I tried deleting a file to see which of the two OneDrives 'responded' and synchronised to the cloud and... it's the one with no local data files. They look identical apart from one has the cloud with downward arrow icons and says I was working on it yesterday 17:18. The other correctly shows which dates I was working on the files, shows them all as being local - but still has the file that I deleted.
One update. Fully broken my setup.
I am SO fed up with this that I am now about to abandon OneDrive and switch to iCloud. I know that only works on the internal drive. I know it expects files in the cloud. But I won't have to fight the thing at every turn.
Microsoft, I've been with you for, goodness, 40 years now. Time to go.