I have only used 30% of my storage, and did not exceed the sync capacity for the amount of folders or files. I deleted a ton of files from the trash in the online cloud files, and I'm still getting this error message.
I'm having the same issue (I'm on windows 10). And on top of that I don't have the "synced" icon on the files so I can't see what files failed to synced as the Creative Cloud App doesn't provide that information. But I have tried dragging some files in and out and can see that at least those file do sync. What is going on? Would be fantastic to get some sync stability.