Endpoint Protection forcing OneDrive on-demand files to download

We have a recent issue with OneDrive on-demand not working which I think is being caused by Sophos Endpoint. Has anyone else experience this?

Was fine until recently but now OneDrive is syncing all files down to the client regardless of whether Files on Demand is turned on. I suspect it is being caused by Sophos Real Time Scanning seeing the placeholder and pulling the file down. 

Interested if anyone else has the same issue?

 

Simeon