Looks like disabling "use office 2016 to sync office files I open" solves this bug (or at least a workaround). It is disappointing that MS cannot come up with any advice or a fix, that we have to figure it out on our
own.
The question now is what did "use office 2016 to sync office files I open" actually do? I.e. what functionality have we now lost? Surely if you save a file on onedrive,
it is synced, and if you save to local FS, it is not - simple as that. What could this check box actually do to change this behaviour?
For me, onedrive has been a constant source of problems, including sync conflicts and unsyncable files when I am a single user who doesn't share a single file with anyone else. It is so easy to break onedrive, just
create a folder and immediately rename it - result is a conflict which onedrive cant handle. It seems to have no concurrent locking or concurrent protection, even for a single user let alone multiple users.
So disabling "use office 2016 to sync office files I open" might actually make onedrive and office more reliable.