OneDrive gives you that too, it now defaults to stream-first for all files. Once you open them they're downloaded locally but IIRC they're just cached (unless you check "always available offline" for them).

Sadly, they're still in a OneDrive folder and not a drive, but behind the scenes it is a virtual filesystem sort of thing (Windows calls on OneDrive service to expand the files), and you can fake the drive letter with subst.