I have been using the selective sync option in dropbox to avoid keeping a local copy of a file. I didn’t know that you could the same thing with iCloud. I am running 10.15.3 and today I noticed an option when I right clicked on a file in finder. There was a “Delete Download” option. When I tried it, it appears that the file was removed from my local drive, but remained in iCloud.
Has anyone seen this and is this working the way that I think it is?