I’m not sure, but I’ll reply now just to try to help.
From what I remember, you can’t use the main “Obsidian” app folder as a vault in iCloud. You’d rather want to have your vault located inside that folder.
/Obsidian/MyVault/
not:
/Obsidian/
It looks like you named your vault “Obsidian”. And so when you went to upload to iCloud, I guess it automatically used the Obsidian app folder as the vault location.
I might be wrong about that though.
And I’m sorry, I wouldn’t know how to know which is the correct version. But I do suggest you not name your vault “Obsidian”.
@romebot you were having trouble in this thread: Obsidian iOS: multiple folders = multitple vaults?
I wonder if it is same cause? I noticed you have the same vault name as “Obsidian”. And I am wonder if this is causing weird conflicts? (But I don’t know!)