Apologies for the confusion.
The default sync model is what is called "progressive sync" and it represents files and folders as placeholders until the user explicitly requests them to be expanded/downloaded locally. This means that new files and folders that are added outside of your local system will be shown as .cloud and .cloudf files until you sync them, either via a right-click->sync or a double-click on the individual item. This is the expected and intended default odrive behavior. As part of this model, any new files added or changed locally will be automatically uploaded to the linked storage. Likewise, any remote changes to files that you have already downloaded will be updated with the new content.
odrive folder sync rules allow you to set non-default behavior. By configuring rules, either globally or on specific folders, users can override default placeholder behavior and, instead, specify that new files and folders are always downloaded.
The latter behavior is what you are looking for, where you can specify that you never want placeholder files at all. This is a Premium feature. The usage guide doesn't call this out as a Premium feature, which is leading to some of the confusion. I will adjust that so it is clearer.