When working with Azure Files Sync, you create whats called a Sync Group, this Sync Group contains two parts, a Cloud Endpoint and one or many Server Endpoints. The Cloud Endpoint is an Azure Files Share (5TB Limit) and the Server Endoint is a folder on a server volume (not necessarily a share).

Due to a current limitation of Azure Files, Azure Files Shares is currently set to 5TBs, this is being lifted soon to 100TBs, but in the meantime, there is a work around as shown below.

Create multiple Sync Groups, split up the folders on-prem, spread them across many Azure Files Shares to keep each folder under the 5TB limit. Pricing as follows.

Customers currently using DFS, Azure File Sync works seamlessly with DFS, essentially Azure File Sync replaces the DFS sync engine.

Azure File Sync interoperability with Distributed File System (DFS)

From here: DFS Replication (DFS-R): Since DFS-R and Azure File Sync are both replication solutions, in most cases, we recommend replacing DFS-R with Azure File Sync.

Migrate a DFS Replication (DFS-R) deployment to Azure File Sync