When I upload files by Google Drive on my Samsung S4, I get full storage notification, so I need to know if G-Drive replicate any file on Android before or after uploading it.
I'd say so. When uploading large files (~200 MB), I have gotten "Low memory" errors, even though I had over 500MB (out of 16 GB internal) free.
This notification would go a few seconds after the upload completed.
Typically, about 300 MB causes low memory errors for me. I have a Moto G3 running the CrDroid custom ROM, 6.0.1 (Marshmallow).
I don't know the Google Drive code, but it certainly seems to be so. Whether the data is cached as app data or on the SD card, I can't comment.