Hello @ThomasJones1 
I'm trying to do exactly this also. I already have a successful 1-way collaboration set up that uses a  hosted feature service accessing referenced data in my portal and syncs out to a copy in AGOL that is hosted within AGOL.
However, now I'm trying to setup a 2-way collaboration I end up with a feature service on either end that references data. I want the AGOL side to be a copy and hosted only within AGOL. 
 
When publishing the original feature service to portal I enable 'sync'. However, after sharing into the collbaoration group and letting it sync to AGOL, the new copy is still referencing the server REST URL. 
How do I get the AGOL copy to be a true, hosted copy?