Files automatically saving to OneDrive occur because Microsoft configures Windows and Office apps to use your OneDrive folder (like "Documents," "Pictures," or "Desktop") as the default save location. This integration means files saved in these folders are synchronized with your cloud OneDrive storage. It differs from saving purely locally as the file instantly uploads to the cloud, enabling access from other devices, and acts as a backup.

For example, saving a Word document in your "Documents" folder (which is now part of OneDrive) makes it instantly available on your phone via the OneDrive app. Similarly, saving photos to your "Pictures" folder means they're automatically backed up online and organized in OneDrive. This is common for personal users managing files across devices and companies utilizing Microsoft 365 for seamless work document access.

The key advantages are automatic cloud backup, freeing up local disk space via Files On-Demand, and easy cross-device access. A limitation is the need for internet access for full cloud functionality and device syncing. Users should be aware this centralizes personal files with Microsoft; managing settings like turning off folder backup or adjusting sync preferences controls where files save initially. Microsoft continually enhances OneDrive's integration for a more unified user experience.