Several restarts later and the above issue does now seem to be fixed :)
This is what fixed it for me...
On 11th November 2017, Hannu-K stated the following....
*"*I got rid of it only changing one OneDrive setting. I ensured in Settings tab that the Files On-Demand checkbox is not checked. This was enought for me and id 2 errors disappeared from the event viewer".
@ Microsoft
Please fix this ASAP so I can continue to use Files on Demand