iCloud files/folders are being duplicated with file 2 file 3 etc.

Over the last few days, all of my iCloud files on my Documents/Desktop folders have been duplicated.

For example:

folder 2

folder 3

file 2

file 3

When in fact, it should only be:

file

folder

I tried deleting the duplicates and renaming file 2 to file, but after a few seconds, it switched back to file 2 on its own.

I've attached a screen recording of this happening. Why is it happening and how can I fix it?

• Mac OS Sequoia 15.0 (24A335)
• 1 TB SSD
• 2 TB iCloud+

[Edited by Moderator]