My Dropbox (Essentials) recently updated to v219.4.4463.
After the update, it started syncing or indexing a large number of files, even though I didn’t change any of my settings.
Since then, the sync icons for files and folders in Windows 11 Explorer no longer make sense.
My default setting is 'Always available on this device', which should display the green circle with a checkmark, but a lot of old files now show the 'Available on this device' icon (white circle with a green checkmark).
Additionally, many folders display the 'Sync pending' icon (blue arrows in a circle).
However the taskbar status shows 'Your files are up to date', and there are no reported syncing issues.
'Save hard drive space automatically' is turned off, and the default setting for new files is 'Available offline'.