I did some research and discovered that while OneDrive can be used to store and share GIS data, Esri doesn’t officially support accessing files directly from OneDrive with ArcGIS Pro due to potential errors. Instead, it’s recommended to copy data locally, make changes, and then upload the folder to OneDrive. Below is a link to Esri’s technical document on the subject.
https://support.esri.com/en-us/knowledge-base/problem-arcgis-pro-and-cloud-storage-services-000025605
support.esri.com
Problem: ArcGIS pro and Cloud Storage Services
ArcGIS Pro does not currently support the use of cloud storage services, such as OneDrive and Google Drive, unless otherwise stated in the ArcGIS Pro user interface or about specific tools and functi