I've only tried it once but it seemed to work very well for me.
When you try to attach file that is too large it asks you if you want to use MailDrop. When you click send it uploads the file and generates a URL for the file that is pasted in the bottom of the email.
Looking at the URL it seems to upload the file to an S3 server thats local to you. I live in Denmark and my file was uploaded to an EU server located in Ireland (i presume).
My URL looked like this: https://s3-eu-irl-105-prod.digitalhub.com/(...)
digitalhub.com is apparently an Apple owned domain.
If you have any questions I would be happy answer them if I can