A Microsoft file hosting and synchronization service.
I am also having the same issue. This might be a macOS Catalina cloud drive recognition issue, but it would be great to have some clarification from Microsoft.
On a side note, does the fact that OneDrive is supposedly taking more space on the hard drive actually interfere with the normal function of the computer e.g. install new software, or SSD slowing down due to too much data? I'm curious to hear from your experiences.