Open and Save Panel Service failing across all apps

I am getting the spinning beach ball across most apps for processes such as file downloads and uploads. The apps stay unresponsive for some minutes, and never complete the action.

Activity monitor confirms that the Open and Save Panel Service is the element that becomes unresponsive.

So far I have seen this with:

Firefox (download, attach), Outlook (attach), Safari (attach), Slack (attach), Remarkable (import file), MS Word (save as), MS Teams (attach) - basically every app I have used I think. I can't include a screenshot with this post for example, because after about 30 seconds of beachball the operations just gives up.

I have seen that disabling iCloud syncing resolved the problem for another user, but their symptoms were different in that the operations ended up being completed successfully.

Does anyone know what might be going on? Unfortunately I am not sure after what kind of operation the symptoms started to manifest late last week.