Turn OFF "files on demand" and it will work quietly and seamlessly.Man OneDrive is brutal on the Mac - hard on the battery, fans running all the time - I tried moving everything from Dropbox to OneDrive earlier this year, but it just didn't work out for me.
Files on demand has been terrible ever since first introduced.
EDIT: I have noticed that @derekamoss has disagreed with my comment above. That is just my experience with OneDrive. I have been a OneDrive user for many years and I love the service, however I have never been able to make "File on demand" work properly on my Mac. Every time I switch it on, I get the same symptoms detailed by @jonnysods above. A simple Google will highlight that many other people are experiencing the same problem. All of that said, it is possible that MS could have solved the issue in one of their very latest updates. I have not tried to use FOD for months now as every time I did in the past it did misbehave and it took a long time to restore the situation to normal. To each his own, however it would have been nice to know the reasons for @derekamoss disagreement as there is nothing I would love more than being able to use FOD with OneDrive on my Mac. If you know how to make that happen, please let me know.
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