Adam, I never did get it to work. Can't remember specifics but I think I got it configured but then just could not see any files in OneDrive repository, or maybe it was still giving errors if the file was over the assignment upload limit size...might be worth taking another look.
That's one of the reason I want to attempt this so I can get links.
Even though I've got upload_max_filesize and post_max_size set properly in the correct PHP.ini I'm getting a random Ajax error that's triggering upload limit using the moodle-o365 repo for direct upload. Strange one.
If I get it working myself I'll post back.