Problem: Updating your macOS to the Monterey 12.3 beta version breaks the cloud-storage features used by OneDrive.
Intended Audience: This internal article is intended for Mac users.
All beta software and patches must be vetted by the IT Department prior to installation on any University owned computers.
The macOS Monterey 12.3 beta update is deprecating a kernel extension used by Microsoft OneDrive to download files on demand. The extension makes files available to you when needed, but they don't take up space on your disk when not in use.
Microsoft has a replacement for this functionality currently in beta.
Microsoft plans to use Apple's File Provider extensions for future OneDrive versions. The new Files On-Demand feature will be on by default, and Files On-Demand will be supported in macOS 12.1 and later.
Note: This also affect Mac users with Dropbox.
Further reading: Introducing USNH IT Data Classification - Approved Data Storage Location