Hi @Harsha
To save on disk space, OneDrive stores the actual file data in the cloud and and the local disk retains a link to the file which is downloaded on-demand.
OneDrive Files On-Demand Feature in Windows 10.
If you encounter the “Access to the cloud file is denied” error message, this means that file does not exist on the local disk, and the OneDrive Files-On-Demand driver is declining to download this file on-demand for backup to read it.
There are a couple of options you have here:
1- Considering these files are already stored in cloud, you might consider an exclusion for OneDrive files on local disks: Excluding Content from Backups using Windows Filesystem Agent. With a local exclusion, you may need to consider protection for these files in the cloud instead with Commvault Microsoft Office 365 Backup.
2- Disable the Files-On-Demand feature so that all cloud files are also retained on local disk. However, this will of course increase disk use locally and increase endpoint backup size.
Thanks,
Stuart