I posted before. My configuration is as follows : I5 Mac, Store photos in iCloud but also locally. Panasonic Raw photos imported (not jpeg plus raw).
I have found if I wait until imported photos are synched with iCloud I do not have this problem. If I edit them immediately a number of problems occur. iCloud synch does not happen for some edited photos. Some corruption occurs and these photos are "stuck". If you try to add photos to shared albums, message is photo not available, and this blurriness occurs. Why ? - all photos are supposedly stored locally. If you are uploading a lot of photos, interpersed with videos this synch takes time. If you look at the bottom of the photos app you will see "Synced with iCloud Just Now" if all photos are synched. If I see synch paused or failed to synch these will be the blurry photos. If you try to export to a shared album it will fail. Identifying the offending photos is hard. But again if I wait for this synch to occur before editing I do not have this annoying glitch. So this work around seems to alleviate the issue for my config. I think that is why editing or rotating helps as it can force a synch on the stuck photo. If I revert to original photo, wait for synch to occur and then edit, no blurriness, no problem.