You could just turn off the OneDrive "files on demand" feature and get the same effect.
I use One Drive as a local working data drive, and the whole issue is I need thumbnails to be rock solid. So I need the files locally and I need thumbnails to work. Thumbnails don't work due to the bug whether the files are in the cloud or if 'files on demand' is off. It was working fine on previous versions of windows and OneDrive.
Just to come back on this, as of OneDrive update: 24.025.0204.0003 (1 March 2024)
One Drive is respecting the local thumbnails again.
I know that is not definitive for every user case but it's back in business on my machine, whatever they changed.
Thanks.