However, in an enterprise with mobile users (traveling or working offline), enabling both can cause confusion: files that go unopened for 30 days may be automatically offloaded (made online-only) by Storage Sense. From the user’s perspective, it can seem like OneDrive deleted their files, prompting support tickets. The takeaway for this post is, both features working exactly as designed and not doing something wrong. It’s about understanding what is occuring, why, and how to setup your users for success.

How Files On-Demand Works

OneDrive Files On-Demand is on by default, as it should be, and displays all your cloud files in File Explorer, with icons indicating each file’s status:

This is a screenshot directly from the Files On-Demand documentation and the overlooked part is what I highlighted in red which is details about Windows Storage Sense. One of the main differences between the green check mark with a white background (locally available file) vs the full green check mark (always available file) is that Windows Storage Sense will not convert the full green check mark back to the blue cloud (online-only) potentially without you knowing.

By default, new files appear as online-only, and Windows downloads them only when the user opens them. For example, if you double-click an online-only document (with an internet connection), it downloads and becomes locally available. Then you can either personally choose to move it back to online only or keep it on your device. But why does this matter and what should the user know?

This is where there can be a disconnect between the OneDrive administrator, or decider of policies, and the Windows device management personnel.

How Windows Storage Sense Works

Windows Storage Sense is an automatic disk-cleanup feature native in Windows. When it runs, it can dehydrate local OneDrive files. This converts them them from locally available (green check mark with a white background) back to online-only (blue cloud) to free space. Microsoft’s docs explain:

“Any files that you haven’t used in the last 30 days can be set to online-only when your device runs low on free space. Storage Sense will only set files to online-only until there’s enough space freed…”.

In Windows 10/11, the default threshold is 30 days. That means if a user hasn’t opened a file in 30+ days and Storage Sense triggers (i.e. the disk is nearly full), the file will become online-only. That sounds reasonable until you apply it to real-world enterprise usage patterns:

From the user’s perspective, this feels like OneDrive did something to their files. In reality, the file remains safely in the cloud but Windows just removed its local copy. The support ticket could then be phrased “OneDrive isn’t working.” The resolution is to ensure the device is online education to right-click the affected folder and choose Always keep on this device.

Why Known Folder Move (KFM) Amplifies the Issue

Known Folder Move (KFM) redirects Desktop, Documents, and Pictures into OneDrive. If you use KFM, and if you aren’t you should be, then Storage Sense can operate on those critical folders. For example, if a user’s entire Documents is in OneDrive and files there go unused for 30 days, OR if the device administrator set a different policy, OR if the device is running low on space, Storage Sense might offload them to online-only status. A user who then goes offline loses access to all their files in their Documents folder. In a KFM-enabled environment without awareness, it’s easy for users to lose offline access to files unless they mark them as always offline prior to travel or times you know you will be offline.

True story…one of the genesis of this post is due to a time I went onsite and couldn’t get on guest wireless and we were in a basement and hot spot wasn’t working and I couldn’t pull up a presentation.

Mitigation Strategies

The good news is there are several ways to control this behavior through policy. The bad news is admins may not know these exist.

Option 1: Disable Storage Sense via Intune or GPO

The nuclear option. If your users have enough disk space and you’d rather not think about, turn Storage Sense off. This is not what I recommend.

Via Intune (Settings Catalog):
Search for “Storage Sense” in the Settings Catalog and set Allow Storage Sense Global to Block.

Via GPO:
Computer Configuration > Administrative Templates > System > Storage Sense
Set Allow Storage Sense to Disabled

Option 2: Prevent Storage Sense from Dehydrating OneDrive Files

This is the better option for most companies. Keep Storage Sense running for general disk cleanup but stop it from touching OneDrive files.

Via Intune (Settings Catalog):
Search for “Storage Sense” in the Settings Catalog and set Config Storage Sense Cloud Content Dehydration Threshold to 0 (zero means never dehydrate).

Via GPO:
Computer Configuration > Administrative Templates > System > Storage Sense
Set Configure Storage Sense Cloud Content dehydration threshold to 0

Option 3: Use OneDrive’s Disk Space Threshold Policies

OneDrive has its own sync policies for managing disk usage that give you more granular control than Storage Sense. These work alongside each other if configured correctly.

Minimum disk space threshold in MB: OneDrive will pause syncing if available disk space falls below this value.

This can also be set via GPO with MinDiskSpaceLimitInMB.

Option 4: Pin Critical Folders as “Always Available”

For users whose roles require offline access to specific folders, you can set folders to always be available locally. This can be done by the user or scripted as part of your deployment.

1. Via user’s pinning it themselves by right clicking on the folder or file and selecting Always keep on this device.

This is what should be made into a KB article with details as to WHY to do this!

2. Via PowerShell (run on user’s device during something like a login script). This can be helpful for remote field workers required to use OneDrive sync when working offline in areas without internet service:

# Pin a specific OneDrive folder as always-available locally
# Replace the path with the actual OneDrive folder path on the device

$folderPath = "$env:USERPROFILE\OneDrive - Contoso\Important Documents"

if (Test-Path $folderPath) {
    # Use attrib to set the pinned state (U = unpinned, P = pinned)
    # OneDrive uses the file attribute to track pin state
    attrib +U -P $folderPath /S /D
    Write-Host "Folder pinned as always-available: $folderPath" -ForegroundColor Green
} else {
    Write-Host "Path not found: $folderPath" -ForegroundColor Red
}

What to Tell Your Help Desk

In the meantime while you are creating that KB article, if users are already hitting this problem, just have them:

1. Ensure the device has an internet connection
2. Navigate to the affected folder in Windows Explorer
3. Right-click the folder and select Always keep on this device
4. Wait for sync to complete

The files will re-download. Nothing was ever deleted. But you’re going to want to get ahead of this with policy and internal KBs. This is something that should be reviewed for what option(s) to do especially if you’re rolling out KFM.

The Bottom Line

This isn’t a bug. Both features are doing what they’re supposed to do. But in an enterprise environment where users travel, lose connectivity, or work from devices with constrained disk space, the combination of KFM + Files On-Demand + Windows Storage Sense without proper policy controls and education to users could raise support tickets.

Understand the Storage Sense policies, your device fleet, your OneDrive policies, and test your configuration before rolling to production. Your help desk may thank you in the future!