Local mode. A large file comes back as a one-time link on 127.0.0.1, which ChatGPT desktop fetches itself; ChatGPT asks its own permission before saving to a folder such as ~/Downloads. PrivacyFence runs under its own system account and cannot read your home folder, so a file path for an upload is refused, and ChatGPT sends the file through an upload link instead.
Organization mode. A download of up to about 75 KB comes back in the tool result; a larger one becomes a short-lived, one-time link. ChatGPT's code sandbox fetches that link and sends uploads itself, over public HTTPS, so unlike claude.ai there is no domain list to fill in. Files has the sizes and lifetimes.
To read a document, no download is needed: PrivacyFence returns a PDF, Word, PowerPoint or Excel file from Drive as text.