NextCloud Client / virtual files feature, "allow local" Where do the files sync to?

Overall question is: Where do the file sync to for virtual files etc. ?

When the client is installed the folder options appear in the explorer as it should.

RE: Virtual files feature.

When I go to a explorer folder aka NextCloud virtual folder and right click, there is an option to allow local.
This seems to start a sync process, but it’s not really a sync like a normal sync where you sync location etc.

Where do the files go when syncing to exactly ?

THEN there is a right click feature afterwards that I can free up space but disabling that feature again.
I didn’t notice any huge file storage use on my computer when I did this so curious where the files are synced or is this more of a cache or paging/indexing feature or something similar.

It’s darn cool whatever it is but I didn’t realize I could do this until I noticed my wife’s computer didn’t have the image previews like it should.

Please advise Thanks