People were getting confused by smart files, Microsoft said, and were trying to open them when they weren't connected to the Internet. Sync will be an all-or-nothing process: You'll sync a folder between a PC and the cloud, or leave it on OneDrive. Smart files are going away in Windows 10, along with the ability to see what was stored in a OneDrive folder without using the Web application.
The changes in the latest Windows 10 build turned out to be more significant than the initial description. As far as you were concerned, there was no difference between local files and OneDrive files. Placeholder files on your PC (aka smart files) showed details of cloud files, letting any application open them - and Windows index them. In Windows 8.1, OneDrive integration meant that files could be stored locally or on Microsoft's OneDrive service, with cloud files either kept on OneDrive until needed or synchronized between PC and cloud. In its release notes, the Windows team noted that Windows' integrated support for Microsoft's OneDrive cloud-hosted sync service was changing so that 'starting with this build, OneDrive will use selective sync.' Last week, Microsoft rolled out a new build of its Windows 10 Technical Preview.