Insync has 2 kinds of sync folders:
Base Folders: the default sync location for Google Drive (My Drive, Shared with me, Shared drives), OneDrive (Files, Shared, SharePoint), and Dropbox (Files, Sharing)
Custom Sync Folders: sync locations outside of the base folder; e.g. your "Documents" or "Pictures" folder could be custom sync folders
Unsynced items are always kept in the cloud, but there are different behaviors for the local copy
Unsyncing items from your Base Folder removes the local copy from your computer, and they are kept in the cloud
Unsyncing a Custom Sync Folder (indicated by a blue folder icon in the Insync app) will keep it in your computer as is, but changes to it will no longer sync with the cloud
Unsyncing items inside a Custom Sync Folder that you've setup will remove them from your computer, but they'll be kept in the cloud. If you sync the items again, they'll be downloaded to the same Custom Sync Folder you've setup.
Why is there a difference in the behaviors? We see that it better matches the use-cases of sync folders -- i.e. If a user syncs their "Documents" folder (as a Custom Sync Folder), deleting the local copy automatically when it is unsynced doesn't make sense.