OneDrive Files On-Demand
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When OneDrive brings all your cloud files to your computer, it is a seamless way to interact, edit, share, and manage those files right within Windows File Explorer.
OneDrive shows up as a separate directory and has multiple icons that show the status - cloud with a blue outline means the files have not been downloaded to the system but are available. Files that have been downloaded to the system show a green checkmark. Lastly, files with a blue sync icon are currently syncing to OneDrive.
The default set up will leave all items in "have not been downloaded" status, but if there is a file or folder you need to access offline, you can right click on the file and select "Always keep on this device."
OneDrive is also great at storage - if you want to remove the downloaded copy of a file, right click on the file and select "Free up space"