According to Microsoft’s known issue page, “Synced OneDrive files might not be deleted when selecting the “Remove everything” option when the device is reset.”
Elaborating on the issue’s specific page, the company says, “When attempting to reset a Windows device with apps which have folders with reparse data, such as OneDrive or OneDrive for Business, files which have been downloaded or synced locally from OneDrive might not be deleted when selecting the “Remove everything” option.”
Basically, if you had files in OneDrive downloaded locally, they may not get deleted when you reset the PC, regardless of which reset option you choose.
Files only stored in the cloud won’t persist, according to Microsoft. “OneDrive files which are ‘cloud only’ or have not been downloaded or opened on the device are not affected and will not persist, as the files are not downloaded or synced locally,” says the company.
To prevent this issue from leaving files on your PC, you can sign out or unlink OneDrive before resetting your Windows device.
Impacted versions are Windows 11, version 21H2; Windows 10, version 21H2; Windows 10, version 21H1; Windows 10, version 20H2. All currently-supported Windows versions could have this problem until Microsoft has a fix.
As far as the fix goes, Microsoft says, “We are working on a resolution for an upcoming release and will provide more information when it is available.”
RELATED: How to Factory Reset Windows 10
