I'm having the same problem as what the user Robio describes here:
https://www.dropboxforum.com/t5/Files-folders/Mac-aliases-within-Dropbox-used-to-work-on-all-shared-devices/m-p/370300
That discussion went to e-mail before a solution was found. Since I'm having exactly the same issue, I would like to know how Robio's problem was resolved.
My problem is this: Aliases used to work in Dropbox for Mac until recently (maybe a week ago?). Until recently, an alias created on one device behaved as it should on another device. The problem did start around when I updated one device to macOS Catalina, but I'm not sure that it started exactly then.
Here's an example of what I'm experiencing. Suppose that I sync my Dropbox folder between two devices, Device1 and Device2. On Device1, I create two folders in my Dropbox folder:
~/Dropbox/Folder1
~/Dropbox/Folder2
In ~/Dropbox, I create an alias of Folder1 using the Finder menu command File > Make Alias. Then I move the alias of Folder1 into Folder2. So now I have
~/Dropbox/Folder2/Folder1\ alias
On Device1, where I created the alias, everything seems to be in order. Folder2 will appear to contain a folder named "Folder1 alias". As desired, this apparent folder will actually be an alias pointing to ~/Dropbox/Folder1. Doubleclicking "Folder1 alias" inside of Folder2 will open Folder1, as expected.
The problem arises when I move to Device2. There, I again see the two folders
~/Dropbox/Folder1
~/Dropbox/Folder2
But, inside of Folder2, there is a file named "Folder1 alias". Instead of a folder icon, the file will have the generic "file" icon. This file will not function as an alias. It is inert, as far as I can tell. At any rate, on Device2, I cannot doubleclick "Folder1 alias" to open Folder1, as I could over on Device1. Instead, I get the error message "Item “Folder1 alias” is used by macOS and can’t be opened."
Nonetheless, if I go back to Device1, the alias continues to work. It's only on Device2 that the alias is broken. Or, rather, it doesn't seem to be even recognized as an alias by the OS.
My two devices are a Mac Pro running macOS High Sierra 10.13.6 (17G9016) and a MacBook Pro running macOS Catalina 10.15.1 (19B88 ). My version of Dropbox.app is 84.4.170.