I've seen that behavior with versioning and OneDrive, it won't show the old versions taking up space. I use OneDrive Business so a simple rclone cleanup command fixed it for me and returned my free space.
So i just reinstalled my system to debian and now its working fine strange enough. Also when -r flag is used in onedrive like while deleting. The files are deleted but when i restore them from surface it does show 0KB Usage. But files are perfect fine. Not tried again for new files but around 560 gb is like this. the files were accidentally deleted. could be a bug on MS side.