The correct quote is as follows: "My database is in my OneDrive folder, but OneDrive is paused.". The pausing makes all the difference in the world.
When you are working in OneDrive, you are always working locally. So working locally or not is never the issue. The issue is whether your local OneDrive database is being synced while you are working in it. If you pause a network service, then your local database is not being synced while you are working in it.
The same thing is true of Dropbox or Google Drive or IDrive or any other such service. The same thing is even true of a local in-home network. You don’t have to be syncing in the cloud via the Internet to encounter the problem. If you have a home network that syncs your RM database while you are working in it, you can have a problem.
There are always two solutions. One solution is the one recommended by RM Support - to move your RM database out of your syncing service. This does not make your database local. It is always local while RM is using it. What it does instead is it makes sure your RM database is not being synced while you are working in it. The other solution is to pause your syncing service while you are working in RM.
RM users regularly report that they keep their RM database in a syncing service and don’t pause the syncing service and have never had a problem. That’s probably true, but that doesn’t mean they won’t have a problem in the future. In my opinion, such users have been very lucky so far and their luck may not hold out.
Finally, if you don’t keep your RM database in your syncing service, you won’t really have a backup of your database in the event of a catastrophic disk failure unless you take some other action to make backups of your RM database so that the backups are not on your local disk. The solution to this problem recommended by RM support is to place your RM backup files (or at least some of them) in a folder which is synced to the Internet. Similar solutions could include making copies of your RM backup files on some sort of removable disk. Similar solutions could include making copies of your actual RM database in a cloud synced folder or on some sort of removable disk.
The Carbonite solution and any solutions similar to Carbonite are a bit of a wild card in all this. Carbonite is more of a pure backup service than a sync service. It has no special folder that is synced and it backups up more or less your whole disk. I have never had any sort of problem at all with Carbonite and RM. I think that’s because Carbonite seems to be much less aggressive than the sync services about backing up files while they are being used than are the sync services. But if Carbonite or other backup services ever do backup an RM database while you are working in it, then that’s a big no no. Carbonite can be paused if necessary, plus it has some options only to backup at certain hours where you are not using your computer. The syncing services do have the pause option, but my experience is that they don’t have the off hours option because they are really designed to sync continuously.