If you’re using either Dropbox or Microsoft OneDrive to sync files on a Mac, you’ll want to pay attention to the release notes for today’s macOS 12.3 beta: the update is deprecating a kernel extension used by both apps to download files on demand. The extension means that files are available when you need them but don’t take up space on your disk when you don’t. Apple says that “both service providers have replacements for this functionality currently in beta.”
Both Microsoft and Dropbox started alerting users to this change before the macOS beta even dropped. Dropbox’s page is relatively sparse. The page notifies users that Dropbox’s online-only file functionality will break in macOS 12.3 and that a beta version of the Dropbox client with a fix will be released in March.
Microsoft’s documentation for OneDrive’s Files On-Demand feature is more detailed. It explains that Microsoft will be using Apple’s File Provider extensions for future OneDrive versions, that the new Files On-Demand feature will be on by default, and that Files On-Demand will be supported in macOS 12.1 and later.