I first encountered this annoying bug with Xcode 12 beta 1 on my Macbook, and it still persists as of beta 4. Makes development experience on/for Apple platforms even worse.

> Do these failures result in any problematic behaviour?these errors just lead to a worsen developer experience that's getting worse and worse and worse with every Xcode update.

Your statement is outright wrong and you try to cover Apple's fault. iCloud Drive had been working more or less without any serius issues up until Catalina. Personally, I had zero troubles keeping my Xcode projects in sync with iCloud Drive prior to Catalina. Also, I've never heard Apple advertizing iCloud Drive's Documents and Desktop sync as a feature not for prosumers. Quite the opposite: they addvertise Mac as the machine for professionals, and so I see no logical mistake in concluding that all it's features are designed with pro users in mind. Even Dark Mode, as they advertise it.Unfortunately, as of 10.5.5 the problem only got worse. If you try to e.g. pull changes, xcode project gets corrupted. The only solution is indeed to stop storing projects in iCloud Drive. Also, somewhat radical solution, stop using this buggy software complex and switch to a more stable platform. Personally, I wait till macOS 10.6 is released to give it last chance, and if nothing is fixed I switch.