Hi, Matt.
With OneDrive Files On Demand enabled and files set to "Free up space" (i.e., file is in the cloud with a local stub), we will receive backup errors for these files and also to their counterparts under VolumeShadowCopy - Error = "Access to the cloud file is denied."

The property details for a file physically on the computer vs stubbed (sure you already know and understand this more than us...):

File on the device:
Attributes: AL
Availability status: Available on this device

Stubbed files ("Files On Demand"):
Attributes: ALOM
Availability status: Available when online

Could we have an additional option under Advanced Filter in the plan Wizard something like:
Do not backup files only available when online ("OneDrive Files On Demand", "Dropbox Online Only")

It's interesting that I don't get errors for files that are online only for my personal DropBox or corporate DropBox or for my corporate OneDrive for Business.

With "Use Block Level Backup" and "Use Fast NTFS Scan" enabled (both forcing VSS) my backup job runs about 3-5 hours. I disabled both of those settings (so VSS would not be used as suggested) and I still get the backup errors on the OneDrive stubbed files (and 3+ hours for the job). Last backup job (typical): 40 files uploaded (146MB), 147606 files scanned, 135GB scanned, 14126 files failed to backup (all OneDrive). Running 5.9.4.245.

I understand Microsoft is changing things up on you, but hopefully you can work out a solution soon.
Thanks.