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Under the Mac OS Ventura 13.0 'system settings > apple ID > icloud > optimize Mac storage > options' with this feature 'on'.
1) Are files stored on both the Mac AND icloud or just the Mac when space is available on the Mac?
2) If files are store on the Mac, is a current copy available to other devices connected to the icloud?
MacBook Pro 16″, macOS 13.0
See the following from the Optimize Mac Storage option on my Mac:
If the Optimize option is on, if the Mac has enough space all iCloud Drive files are stored both on iCloud and on the Mac. If the Mac doesn't have enough space, some files will only be on iCloud and will not have a local copy.
Also note that if that option is Off, then all iCloud Drive files are stored both on iCloud and on the Mac; the Optimize option is designed to potentially reduce the space needed on the Mac.
If any or all of the files are stored locally on the Mac, they are also stored on iCloud. Any changes you make to the local copy are synced with iCloud and with other devices where iCloud Drive is turned on.
Also see other information in: Access and manage your files in iCloud Drive - Apple Support
See the following from the Optimize Mac Storage option on my Mac:
If the Optimize option is on, if the Mac has enough space all iCloud Drive files are stored both on iCloud and on the Mac. If the Mac doesn't have enough space, some files will only be on iCloud and will not have a local copy.
Also note that if that option is Off, then all iCloud Drive files are stored both on iCloud and on the Mac; the Optimize option is designed to potentially reduce the space needed on the Mac.
If any or all of the files are stored locally on the Mac, they are also stored on iCloud. Any changes you make to the local copy are synced with iCloud and with other devices where iCloud Drive is turned on.
Also see other information in: Access and manage your files in iCloud Drive - Apple Support
Optimize Mac Storage Operates How?
