I agree with everyone here. This change wasn't totally clear to me because I was running the preview builds in a VM that was light. I wasn't syncing OneDrive or anything because it was just a test machine. Luckily, I upgraded my laptop with a 500GB HDD first by sheer luck. My Surface Pro and Dell Venue 8 Pro staying on Windows 8.1 until further notice. This is such a bummer... I'm slowly starting to believe Microsoft really should have pushed this release of Windows 10 back to October. There's too many things on their end in transition/non-finished states. MS Edge isn't done and is missing, what most would consider, some pretty basic features (it doesn't sync bookmarks and tabs like IE11 did, missing extension support, doesn't allow tab pinning or stacking, doesn't allow custom download locations, etc). Office 2016 isn't done yet. The "Project to Screen" is missing for apps, so I can't push videos and pages to my Xbox One (though strangely, Xbox to PC streaming is done and done well by release. Headscratcher...). OneDrive is supposed to have this Smart Files stuff figured out "by the end of the year?" Come on... Either redo the idea or leave it as-is, man.
They've got to realize that this kills the HUGE OneDrive incentive on Windows 10 machines. They offer 15, 100GB, 200GB, 1TB, and Unlimited packages for OneDrive. Now your device has to EXCEED those storage amounts, so you essentially have to a device larger than 128GB (because you've got the OS to consider) for any account other than a free 15GB account. How aggravating...
It's all so annoying because they're getting SO CLOSE to getting everything right but things like this make me more annoyed than not having the functions at all. I guess I just enjoyed Windows 8.1 more than most and some of these changes don't seem like a company working towards innovation but, rather, towards compromise. Guess it's time to fire up my NAS again...