Fairly old news, but I believe that it should be talked about more as it is a massive problem for Windows users, particularly those who aren’t tech savvy. OneDrive is not E2EE and therefore, anything that is automatically backed up is readable by Microsoft.
Some have reported that even uninstalling OneDrive is insufficient to prevent this, as major updates will reinstall the program. The only good solution AFAIK is to switch to a local account. If you must continue to use Windows, please do so, in your machine and your family members’
As OP knows, this issue has existed for quite a while. It is not one where “users can just opt out” and then it’s done. I know of people who went to great lengths to try to opt out but failed, and found they had all their data stolen from them.
I was aggressively critiqued here for saying Windows is insecure, but this OneDrive issue is exactly one of the things I refer to when I say Windows is insecure. Further, someone may say “that’s privacy not security” but that is not quite true. When people’s data is taken from them, it’s 100% a security issue that in general undermines more than just privacy.