Files on demand does not work on 16299. I've no option for that on OneDrive !
Latest onddrive app does not always update when doing larger update to Fall Creator. Use Bing and search "onedrive file on demand" and it will give you full instructions how to update onedrive app to latest version with file on demand.
Marcelo Curado commented
I had to download onedrive after upgrading my w10 to the fall creators update.
I have dowloaded onedrive from this link: https://go.microsoft.com/fwlink/p/?linkid=851311
The link was on this MS webpage: https://support.office.com/en-gb/article/Learn-about-OneDrive-Files-On-Demand-0e6860d3-d9f3-4971-b321-7092438fb38e?ui=en-US&rs=en-GB&ad=GB
Hope this helps!
Same for me even after clean install