All files and folders gone from iCloud on Mac, still on web and iPhone

Out of the blue, all my iCloud files and folders were gone from my Mac, even though I can still see them on iPhone and iCloud.com

Can someone explain what may have happened?
The only thing I did, before this happened, was delete some files that were taking too much space. I didn’t change any settings, didn’t enable the Desktop and Documents, option, nothing. All I did was delete 4-5 folders.

Now all I see is this, because after the files were gone, I opened Obsidian to see if they were actually gone or just hidden or something, so Obsidian created that folder. And yes, all files were gone, because Obsidian doesn’t recognize the vault with all my notes, Cryptomator also doesn’t recognize an encrypted vault I created.

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And when I hover over the cloud icon I see “Waiting to upload” but it seems stuck