Hi!
I normally reassure our users that they can interact with Dropbox files "normally" without worrying too much about what's synced where (local or cloud), since Dropbox takes care of everything in the background, which is generally true.
But today I hit a glitch myself, on a Mac in Photoshop 2022, I edited a certain File A, then used "save as" with the intention of overwriting a different file, File B. Finder asked me to "confirm replace," which I did. Assuming all was successful, I then closed File A.
Unfortunately, since File B was a cloud copy, apparently it could not be saved over with the new version--so the edits were lost. I went over this with Dropbox Support, who advised I should have local-synced File B first.
I suggest the save as > replace action should automatically local-sync File B if needed in this situation. Or, if that can't be done, perhaps a warning added that you're trying to save over a cloud file--but you can't.
I actually thought this might be a bug, but I'm told otherwise by Support. Thank you for looking at this as a new feature!