Why won't the new 12.2 on my M1 MacBook Pro duplicate a file or a folder?

Why won't the new 12.2 on my M1 MacBook Pro duplicate a file or a folder?

I'm also having problems opening Microsoft documents. Here's the message I get from the Finder

I've moved all my files into the iCloud from my hard ririve and perhaps the OS couldn't keep track of where the files are.

And that may have something to do with the problem duplicating files and folders?

How can I make the computer figure out where to find everything?

Then, again, these may be 2 distinct unconnected issues.