In general, please keep in mind that Dropbox Backup Beta can back up files and folders backed up with iCloud, Google Drive, and One Drive. However, it’s recommended, but not required, for you to disable those before using Dropbox Backup.

If you’re on the legacy version of Dropbox Backup, you must disable your other backups before using Dropbox Backup.

So, basically, the iCloud settings on your device will show which apps sync and store data along with iCloud.

Hope this clarifies things.

UncleRicky

What I would say, and I'm not a tech person, is that because the Dropbox folder is inside a Mac "cloud storage" folder, and the Dropbox app reads and writes to that Dropbox folder, this causes the Mac to think that the Dropbox app is using iCloud. But it's not; not the way I believe you (and myself) are understanding that line on the iCloud panel.

iCloud "should know" that the Dropbox app is not synchronizing to iCloud Drive, but it doesn't, because the code on both the Apple side and the Dropbox side is so complicated, and the developers don't talk to each other to figure out what's in the best interests of the customer.

As I'm setting up a new computer and coming across various issues, such as choosing the right filesystem to use, I see many times the root of the trouble is Apple's proprietary way of doing everything. Apple rolled out the .heic format for photos, for example, replacing .jpeg, without telling anyone, or at least they didn't tell me. And they haven't released the protocols for the APFS filesystem, making it more difficult for developers than it needs to be. And of course it's difficult or impossible to upgrade the hardware on an Apple device. So their reasons are their reasons; nevertheless my sense is Dropbox is taking the heat for decisions which Apple made.