The Storage Drain
macOS deeply integrates with iCloud Drive. If you enable the “Optimize Mac Storage” feature, Apple attempts to intelligently manage your hard drive space. It keeps recently opened files on your local drive for fast access, but offloads older, rarely used files entirely to the cloud, leaving behind a tiny placeholder icon (indicated by a small cloud symbol with a downward arrow). However, if you attempt to open a large folder, or perform a system-wide search, macOS might panic and automatically begin downloading gigabytes of these offloaded iCloud files back to your local drive without prompting you, instantly filling up your remaining storage.
Disabling the Optimization
To retain absolute control over your local storage and stop macOS from automatically downloading iCloud files in the background, you must disable the Optimize Mac Storage feature.
Click the Apple logo in the top-left corner of your screen and select System Settings. At the very top of the left-hand navigation sidebar, click on your Apple ID (your name). In the main right-hand panel, click on iCloud. Under the “Apps Using iCloud” section, click on iCloud Drive. A new dialogue box will appear. Look for the toggle switch explicitly labelled Optimize Mac Storage. Click this toggle to turn it Off. When you disable this feature, macOS will download all your iCloud files to your local drive one final time. Once that initial sync is complete, the OS will stop dynamically offloading and redownloading files; everything in iCloud will permanently reside on your local hard drive.