I just tested on my Significant Other’s iPhone but I can’t repro …
Did you check in your iPhone's settings > Apple Account (the very first menu with your picture ) > iCloud > under “Saved to iCloud” tap Drive > Apps Syncing to iCloud Drive … Obsidian should be in that list and toggled On.
Although, from what I’m seeing, if Obsidian is disabled in Apps Syncing to iCloud Drive, Obsidian (1.6.7) displays an error which can’t really be ignored (), so that might not be it though …