Here’s my update for everyone that has a large online-only vault stored on OneDrive. Using OneDrive’s “Files On Demand” feature indeed works like a charm.
I’ve updated to Cryptomator 1.5.0 RC2 and just gave it a try. My online-only vault is >500 GB. I selected it to be available on demand and then migrated the vault.
It’s important to wait. First of all wait until Cryptomator says it has finished the migration. Then you need to wait until OneDrive has fully synched. Depending on the number of files (not the vault size!) this can take a few hours. My vault has ~90k files and it needed 4-5 hours to completely sync.
So I can give green light on this. It just works like a charm. Yay! 