Azure File Sync doesn't offer built-in quota functionality. If you wish to control the amount of storage a user can use, this would have to be done on the local file system. You can still enable cloud tiering if you have a volume-level FSRM quota. Once an FSRM quota is set, the free space query APIs that get called automatically report the free space on the volume as per the quota setting.
Also, it's important to note that the volume free space percentage used for tiering calculations is the percentage of logical free space, not the physical free space. Even if you're using FSRM to limit usage, Azure File Sync may continue to tier files based on the logical free space on the volume.
Please be aware the quotas will also impact sync if the quota is reached.
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