I’ve merged your post over to this one, which seems a lot more relevant to me than a discussion from 2009.
OneDrive has never been recommended by Scrivener…
With the exception of an old issue involving a default setting in Windows 8, we haven’t seen a degree of reports that would suggest it is unsafe to use. Parsing your words very literally though, it is true we don’t recommend it—but some people take that to mean a warning to not use it, whereas the literal parsing of that could also mean we just don’t recommend anything specifically, and leave that up to you.
As for OneDrive’s on-demand thing, I’d have to dig up an older discussion about it, but on the Windows side, users were reporting it seems to work fine with folder-level editing like Scrivener does.
It’s not surprising to me that they are having issues implementing it for Apple operating systems though. Apple is continuing to move further away from extensible systems and toward black box designs like iOS. The tools they were using to make “on demand” type stuff safe, isn’t there any more (this is an issue for Dropbox too, though they may be trying to work around it).
I would also add that overall we do not recommend (in the sense of a warning) any kind of “on demand”, “smart sync” or obscurely titled stuff like “optimize my disk space” settings, in cloud tools. They are not good for complex file formats, and in general I would say they are unsafe to use as you no longer have control over your file system, and your local backups are compromised, missing files the cloud service deems fit to delete.