Comment by xp84

Try it yourself and see. Something about macOS cloud file provider system that they all use now has a built-in requirement that you must locate that “OneDrive” or “Google Drive” folder on an “internal” drive. Assuming you have a $6000 Mac Pro you can have as many internals as you want, but for the rest of us “internal drive” means the one single drive soldered directly to your motherboard.

Of course, predictably, iCloud Drive gives you no configuration of where you store the local copy, so it’s stored in some weird path specifically on your boot volume.