What Windows 10 version are you running? Files On-Demand runs on Build 16215 only. Meanwhile, you can try it again. After installation right-click on One Drive icon at the System tray and click on Settings. Next select the small box close to Save Space and download files as you use them and Click the Turn On button.
16215 of course as I said after the activation procedure OneDrive goes offline and comes back in its previous state. May be I have to uninstall OneDrive and reinstall it