To those Mac and Dropbox users still suffering this annoyance, there is a slightly easier way to resolve it than having to repeatedly quit the Dropbox app.
- In a Mac desktop window, click on the folder containing the duplicated file.
- Right click or ctrl click it.
- In the pop-up menu select 'Make available offline'.
- That resolves the issue for me for all files in that folder.
It's as if Dropbox is unable to set the default for duplicated files on Mac to 'Available offline', even though that option is selected in 'Sync and storage'.