A Microsoft file hosting and synchronization service.
Dear Dejiovanni,
The File-OnDemand option may be disabled by the administrator in your organization.
If he disables it by Group Policy via the the steps in IT Admins - Use OneDrive policies to control sync settings - SharePoint in Microsoft 365 | Microsoft Learn, you will encounter the issue.
I suggest you contact the administrator if you aren't the administrator for confirmation and you may let him enable it to fix the issue in your environment.
Welcome to share any updates at your convenience.
Thanks for your effort and time.
Sincerely
Cliff | Microsoft Community Moderator