Here is an article designed for macOS IT SysAdmins to move Desktop, Documents, etc. to a cloud drive and symbolically link back to the home folder normal paths. Then also recreating the Finder left-sidebar Favorites.
I do not recommend running the script but read through it to understand it.
The script is meant to be customized to your particular situation.
The first few lines at the top are variables you need to define, etc.
https://www.c-amie.co.uk/technical/redirecting-home-folders-to-onedrive-dropbox-or-google-drive-on-macos/
Summary:
- Move the original Documents (and optionally other folders) to the OneDrive folder
- Create a symbolic link in /Users/faizal/Documents pointing to /Users/faizal/OneDrive/Documents
- Recreate the Favorite item in Finder sidebar so it still works.
Rinse and repeat for each other folder such as Desktop, Pictures, etc.
OneDrive keeps a local copy of the file and uploads the file to the cloud. Moving them on disk will be quick but it may take time for the cloud copy to be sync'd. It should not hurt performance locally. However, depending on how you pay for your Internet bandwidth, in some parts of the world this would increase your network costs. I would recommend a fairly fast broadband connection for OneDrive usage. OneDrive works remarkably well. I use it at work between multiple Macs and PC's.
OneDrive is not exactly a backup solution. If you delete something in OneDrive it's placed in the cloud RecycleBin where it will be erased after 30 days. If you use Free Space instead of Delete then the local copy is removed with a pointer to the cloud copy left in place. If you have more than one computer accessing this OneDrive you can also force a local copy to always be kept on one device.
You should establish a backup process as a precaution, just because files are in the cloud as a sync'd copy you need to ensure you have a backup such as Time Machine to provide historical backup over time.