Why does OneDrive take up so much space on my iPhone?

I have my iPhone XR (iOS 15.6.1) connected to OneDrive for the usual reasons: access across devices, sharing with friends, etc. However, OneDrive is consuming a lot of storage on my phone. Clicking on Settings | General | iPhone Storage shows OneDrive storage allocation of over 7 GB. Shouldn't OneDrive storage be just enough for the app itself (about 300 MB) with data/documents being close to 0 GB since all my photos/videos/files are stored in the OneDrive cloud? What am I missing here?

Thanks....