Following on from duskwuff's answer, the issue with OneDrive folders has been resolved as of version 1.8.6.
https://www.arduino.cc/en/Main/ReleaseNotes
ARDUINO 1.8.6 2018.08.23
[ide]
- Updated arduino-builder to 1.4.0:
- parallel build (improve compile speed)
- better reuse of already compiled files
- Windows: fixed build for sketch stored under OneDrive cloud folders
Simply update to a newer version of the Arduino IDE and you will be able to compile and upload your sketch.