Apple's kernel-extension purge breaks Smart Sync online-only files
2019–2022
Dropbox's Smart Sync depended on a macOS kernel extension to present space-saving 'online-only' placeholder files; when Apple deprecated third-party kexts in macOS 12.3, opening those online-only files could break until Dropbox re-engineered the feature.
What happened
Dropbox's Smart Sync feature (launched as Project Infinite in 2016) showed every file in the macOS Finder while keeping space-saving 'online-only' placeholders on disk, downloading the real contents only when a file was opened. To intercept those file operations and materialize placeholders on demand, Dropbox built a macOS kernel extension using Apple's Kernel Authorization (Kauth) subsystem.
Apple then moved to eliminate third-party kernel extensions for security and stability reasons — deprecating them in macOS 10.15 Catalina (2019), tightening restrictions in Big Sur (2020), and delivering the decisive blow in macOS 12.3 Monterey (2022). Apple's own release notes confirmed that 'the kernel extensions used by Dropbox Desktop Application and Microsoft OneDrive are no longer available.' Because that kext was exactly what allowed third-party apps to open online-only placeholders, its removal created a data-availability problem: on macOS 12.3, users could temporarily be unable to open online-only files in some applications, with the interim workaround being to open files through Finder to force a download.
Dropbox responded by rebuilding Smart Sync and online-only files on Apple's user-space File Provider framework, going fully 'kextless' and relocating the Dropbox folder to ~/Library/CloudStorage — part of a broader sync-engine overhaul.
Impact
The kext deprecation meant that a core space-saving feature could intermittently fail to deliver files on demand — the cloud equivalent of a file that looks present but won't open. The forced migration to File Provider also broke long-standing assumptions about where the Dropbox folder lived, disrupting symlinks, scripts, and third-party integrations. It is a clear example of how Dropbox's reliability depends on platform decisions outside its control, and how a feature can degrade for users through no fault of their own.