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The files will be stored locally but not synced, and you'll have to choose which folders to sync.
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All too good to be true
This is one reason why you should not rely solely on cloud backup, especially one that you aren't paying anything for (assuming you are downgrading to free version). If you don't have any way of backing up to another computer, at the very least backup to iCloud as well.
But surely you can stick a copy on a USB drive via a friend/relative's computer?
chrisbmx116
chez_jay
@ExTra
Not Mac related question, but whatever. What will happen when I downgradge my Dropbox? Will all the already there files still be there that I can download? That's what Dropbox says I can no longer upload exceeding the storage limit but whatever was there will still be there. All too good to be true and I don't want to have to pay ransom to release those files.