Prior to 2016, the dropbox app managed which files were synced with your filesystem, and you could always go into the Dropbox app to see the files that weren't synced.

As of 2016, dropbox started to intercept calls to open/move/delete files at the kernel level – https://dropbox.tech/infrastructure/going-deeper-with-projec... – this allowed them to create proxies for all the files that weren’t synced, and to then download them whenever something tried to open them.

The API they used for that was always intended for Antivirus and similar programs, but it worked. Apple replaced that API with a new one which is a lot more narrowly targeted to Antivirus, and dropbox couldn’t use it.

Dropbox could try and do things without any API, but they’d get themselves kicked off the App Store, they’d need to convince users to turn off 'System Integrity Protection' which would try to keep the OS kernel unmodified, and their implementation would be prone to breaking at any time.

Just managing the files by themselves would essentially be going back to the pre-2016 approach, and the file provider API is better than that.