Hi,
Thanks for posting in our community.
Based on the detailed description, we do understand the inconveniences it caused on your side with the latest updates in OneDrive for Mac desktop app that Files On-Demand will be enabled automatically. Kindly check the statement in the official article: Save disk space with OneDrive Files On-Demand for Mac (microsoft.com)

For the possible workaround currently, it is suggested to right-click on the offline-needed files/folders and select 'Always keep on this device'.

For this updated setting, we do understand that it would be better if there have another button/option to turn off the Files On-Demand feature instead of selecting all files/folders manually. As forum engineers here have limited resources to the building of OneDrive apps, kindly submit your feedback to the related OneDrive for Mac product team so that they can get informed that this can cause some inconveniences for users who need files locally when offline. See: How do I give feedback on Microsoft Office?
Your understanding is highly appreciated and hope a nice day for you!!
Best Regards,
Mia
This is an extremely customer hostile stance.
It means that I cannot reliably back up my OneDrive files on a Mac. If I make a mistake, delete a file in Onedrive, and the change syncs and I don't realize it, I have no backup. Surely, Microsoft can come up with a more customer friendly stance.
Moreover, if I am offline, have previously created a new file and forgotten to mark it, and apparently I must now do for every single file that I want local access to, I cannot get to it. This is truly ridiculous, and it enrages your customers. Why would you do such a thing?
Please, have mercy. Fix this problem. I can't even pretend to call it a feature. It's a problem.
Many regards,
Katherine