I've been wondering this as well, since the config for OneDrive has options for both "Internal (files stored in Moodle)" and "External (only links stored in Moodle)".
I've got the latter selected on a test setup, but the repo still seems to download the files into Moodle. The file store will grow by the approximate size of the file chosen on OneDrive, file size limits in Moodle will still be applied (I would have thought this was irrelevant if the file is outside of Moodle) and if you delete the "linked" file on OneDrive, Moodle is unaffected. If the OneDrive plugin were simply using a link, I would expect the removal of the file form OneDrive to break the link.
Unfortunately this isn't what I need, I'm trying to set up a link so that my client can use the large amount of storage they have for individual users on OneDrive to store oversize assignment submissions so that they don't have to pay for a significant increase in the storage for the Moodle server. Using the OneDrive plugin in link mode seemed like the answer to that, but in practice it doesn't work this way.
Moodle office tool integrations
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