After talking to support via Chat, it's been clear to me that Dropbox doesn't have a clear solution for Time Machine & Smart Sync Online-Only files on MAC OS. (Big Sur)
You have online files that are forced to being local by time machine in OSX even though you set them to be 'ONLINE-ONLY' files.
The 'Solutions' (Workarounds) given so far to me via support:
- Disable Time Machine... HA! - Disable automatic Time Machine > Quit Dropbox > Do a backup > Open Dropbox... meh, the good part of Time Machine is the 'Hands free' backups - Use Selective Sync (Not Smart Sync), but then I have to upload files for that folder via browser and not through folders... meh - Disable the folder from Tima Machine's backup... Yeah possible, but again, a workaround.
In other words, the solution is to prevent 'normal usage' of Smart Sync & Time Machine.
But then I asked myself why do we have 'Smart Sync update for Mac' in our settings. Supposedly, it makes the files that are online-only 0kb and therefore shouldn't be backed by Time Machine/shouldn't be forced by time machine to become local. However, Time Machine keeps on forcing these files to become local.
In other words, there is no DIRECT SOLUTION to this problem other than WORKAROUNDS to prevent this problem to happen. As a consumer, I find it a bit unacceptable since there are NO MENTIONS of compatibility issues between both of these software and, therefore, it's shouldn't be the 'consumers fault' for using both Time Machine and Dropbox that these don't work properly together. Plus, the 'solutions' offered are honestly not acceptable by the size of Dropbox. As said, Dropbox's support (at least the one I had) on this matter is: "There's nothing we can do about it"
If anyone has ever found a solution to this issue, please let me know.