iCloud "Folder Not Found" after closing Lightroom

Using Local, I am getting a "Folder Not Found" error each time after closing down Lightroom if the Local destination folder is on iCloud Drive. I can edit the files just fine and they are all offline, but after closing Lightroom and reopening it, it claims the folders are not found. This also means that a folder on iCloud cannot be marked Favorite as LR just deletes the shortcut under Local after the "Folder Not Found" message.

[moved from bugs to discussions according to the community rules - Mod.]