Hey there @newpointadvisor - thanks for using Smart Sync!
Could you please let me know if you notice this on new files or already existing ones and if this affects only a specific device?
Also, do you happen to run any 3rd party apps or services that look at (or index) your files?
Note that a number of applications can cause Smart Sync files to be recalled. While anti-virus applications and programs such as Microsoft Word and Adobe Photoshop which have "recents" menus are the most likely culprits for this, there might be something else causing this.
Moreover, while you can set the new content to be "online only" by default for the whole team (via your Admin's console, I guess you already knew that though), there is no way to control how your team's members are going to be accessing the files in question (they might even change their Smart Sync settings from their app's preferences), meaning that depending on how (you and) your team's members use these files, you might see files returning as local after having worked on them.
I hope this information helps to some extent and I will be waiting for your next reply here so as to get a better understanding of your inquiry in order to send you the most appropriate information and next steps if needed.
PS: I don't if you're interested, yet have you heard about the team selective sync feature?