Files On-Demand
We must prepare the application similar to OneDrive on Windows - synchronization list of files stored in cloud and synchronization of selected files.
During the investigation we found a very nice library to manage On-Demand Files in Windows from C# - ShellBoost.
List files from the cloud as local files
Show list of on-demand files in a local folder

Show folder with files as Namespace extension

With ShellBoost we can synchronize files in a very cool way. We can show sync status, we can do all operations like on regular files, additionally, we can synchronize items or remove them from synchronization.
Unfortunately, we met some restrictions
File Status column problem
Problem is that with ShellBoost and Files On-Demand we can't set additional icons in the status column like OneDrive does it

Example
Here is a repo with the example https://github.com/m4tchl0ck/ShellBoost-My-Samples