Files disappeared after adding .nosync to folder/file

As per this article Show or hide filename extensions on Mac - Apple Support

When you rename a file or folder, don’t change its filename extension, or you may no longer be able to open the file with the app that was used to create it. To be warned before you change an extension, select “Show warning before changing an extension” in the Advanced pane of Finder preferences.

If you want to change a file’s format, use the app you used to create the file. For example, TextEdit can convert a document from plain text format (.txt) to a rich text format (.rtf), and Preview can convert many types of graphics files.

Make sure you had turned on iCloud Drive and desktops and documents box see the articles Add your Desktop and Documents files to iCloud Drive - Apple Support

Use iCloud Drive to store documents on your Mac and iOS devices - Apple Support

Get file, folder and disk information on Mac - Apple Support

iCloud Drive FAQ - Apple Support

Note : you can't find file using spotlight Search with Spotlight on Mac - Apple Support , as it was never saved in iCloud.drive section .

Try the "info" button in the upper right. You can rename docs there. I was able to successfully add/remove nosync provided the document still "sees" the original extension. That cause an immediate download. You should also be able to just download the file from iCloud.com back to your Mac.

Check iCloud.com to see if the file was uploaded.