Before We Start: This article is relevant to anyone who has synced or will be syncing SharePoint or OneDrive sites, folders, or files to the File Explorer app.
A blue cloud icon next to a OneDrive file or folder indicates that the file is only available online. Online-only files don’t take up space on your computer. You see a cloud icon for each online-only file in File Explorer, but the file doesn’t download to your device until you open it. You can’t open online-only files when your device isn’t connected to the Internet. This is the default anytime you start a new sync.
When you open an online-only file, it downloads to your device and becomes a locally available file. You can open a locally available file anytime, even without Internet access. If you need more space, you can change the file back to online only. Just right-click the file and select “Free up space.”
Only files that you mark as "Always keep on this device" have the green circle with the white check mark. These always available files download to your device and take up space, but they’re always there for you even when you’re offline.