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Using Google Drive File Stream, all files and folders are available online only by default.
Files that are shared with you are only available in the Google Drive web interface. Sharing permissions are set up and managed through the browser.
If you need to store some files/folders locally on your hard drive, you can do that by selecting the Available Offline option.
Files that contain Level 2 data should not be made Available offline. See the What level of data can be synced using Drive File Stream? FAQ for more information.