A restart resolves the problem temporarily.
I am running system from an external SSD.
UPDATE: It will also not save to desktop. I don’t have Desktop/Documents iCloud synch enabled. I saved a screenshot to the desktop. At first I could open it but 20 minutes later I can’t
I’ve also experienced the issue of not being able to open any iCloud files.
The easiest way to clear the issue is to restart the Mac.
For me this usually works for a few days and then the issue recurs.
Disabling and re-enabling iCloud Drive also clears it, but again it’s only a temporary fix and it’s a lot more of a pain than re-starting.
I’ve also experienced the same problem once on my iPhone, which makes me suspect it’s more of an iCloud issue than a device specific problem. Again a device restart seemed to cure it.
Interestingly it affects multiple user accounts with different iCloud accounts at the same time. So an iCloud sign out/in wouldn’t be a real solution I assume
Are you on an APFS volume?
And if so: is it an upgrade volume or a newly formatted one?
I’ve seen, and heard of, lots of issues with upgraded APFS volumes misbehaving.
It was an upgraded APFs volume. I nuked and paved and all seems OK (except for weird freeze every 2 days - the Mac is all getting back to the 90s with crashes, freezes and things not working!)