iCloud is extremely slow. Updates in files can take 10 minutes or more to propagate, especially if two or more people have been editing them. If you’re the only one editing a file, on multiple devices, it’s still slow but much less so.
It also tries to be clever about what it syncs and when, with no options (that I’m aware of) to force it to simply fetch local copies of everything. This makes it unusable for files that you want to access in a terminal as the terminal is, for some reason, not part of the clever sync on demand system.
However, if you want to get fancy with sharing stuff with applications on iOS, such as, for example, an Obsidian file directory or some other set of markdown files to view and edit on the go, you’re pretty much forced to do it in iCloud as the Dropbox file provider on iOS is extremely unreliable and prone to locking up, even if you’re the only one editing the files. For this use case you’re pretty much condemned to iCloud.