Correct, there is no setting called ‘items created in…’ that was a link to a screenshot showing the ‘Sync new top-level cloud…’ which actually appears to have moved in 3.0.23 to the settings icon next to ‘My Drive’
So it sounds like only items created in folders with a yellow check mark are not automatically downloaded locally by insync. This is pretty much the exact issue we had in windows which appears to have been fixed.
I asked about yellow checks in another thread:
The only way to change yellow icons to green is to unsync and then resync the item. I just tested and found that when I do so, the items are downloaded from the cloud (not uploaded to) and marked with green icon. The simplest way to change all items from yellow to green is to remove the account and re-add it as new so insync uploads/downloads files instead of doing the ‘local-to-cloud file matching’.
My observations based on user experience and various topics here, is that ‘local-to-cloud file matching’ (yellow icons) is not working correctly and leads to many problems including various sync errors (see Error AddCloudGDItemL(‘Unsupported file type:%r’, ‘?’)), most of which are solved by doing a full fresh sync.