iCloud Drive documents disappeared from Mac and iPhone

This morning, on my MacBook, I wanted to open a document in iCloud Drive to continue working on it where I left off yesterday. To my astonishment, I saw that ALL the documents in my iCloud Drive folder now have the iCloud icon with the down-pointing arrow next to them. As if they were all unloaded. I have 13,000 documents in my iCloud Drive alone. This means that I have to re-download every document I wish to work on. Even those that I worked on yesterday which I know for a fact had been synced with iCloud.

I found the same issue on my iPhone. Everything in my Files app also has the iCloud icon with the down-pointing, which means I need to download them again to work on them.