Yes, OneDrive downloads the file before usage. I think the main reason is indeed the difference in hardware + the size of the project: I get the problem on an iMac with a classic hard disk; I got no issue on a recent MacBook Pro with SSD as you hinted at…
The project is very large, it is the one I was mentioning in another topic about the number of photos that Tropy could work with. I have passed the mark of 10K but should still be under 20K now. Happy to share my project file, can you remind me your email address?