Based on https://learn.microsoft.com/en-us/windows/win32/fileio/spars... and subsequent links, it sounds like sparse files count against disk quotas as if they weren't sparse, but otherwise sparse files actually work on NTFS.

If sparse files didn't save on actual space allocations, it would simply be a lie to call them sparse files. Granted, that's totally something Microsoft would do, and has done for other features they lack, but that doesn't seem to be the case here.