A family of Microsoft products that enable users to capture, organize, and reuse notes electronically
My thinking, and others please correct me if I'm wrong, has always been that syncing OneNote notebooks via the OneDrive sync client is a bad idea. My thinking is that a local cache is created by the client, so pulling down a copy would likely just see constant updates as the file is worked, and it would sync basically endlessly. With the client creating a local copy, it seems unnecessary.
For those reasons, I've always explicitly excluded my Notebooks directory from syncing locally via the OneDrive client. That being the case, Files-on-demand is out-of-play for me.
BR