This is first bug I'm reporting on Bugzilla, so I apologise for any beginner's mistakes. I find this system a tad intimidating...

The issue is simple: after installing the nextcloud-desktop, nextcloud-desktop-vfs-plugin, and nautilus-extension-nextcloud packages - as well as configuring nextcloud.cfg and configuring sync connections - the overlay icons in nautilus appear, but are all stuck on fully green, indicating all files and folder are "Always available locally". This is not the case. On my system, all files and folders except for one file are in fact "Available online only". So it's just the overlay check mark that is incorrect.

The right-click Nextcloud menu works fine. I can choose which files and folders to "Make always available locally" or to "Free up local space".