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Hi Dheepa,
Thanks for the feedback.
About the first issue you mentioned, If the file is view only, I don't think it will have a conflict with the downloading. Because even if the users edit the downloaded view-only file, the changes will not sync to the Document Set. The editing to the downloaded files only happens locally.
And about the second one, the feature is not available in SharePoint Online. You are welcome to share your idea in SharePoint UserVoice. Thanks for your understanding.
Regards,
Alex