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I've encountered this twice now with .psd files created 2 years ago on Dropbox in a shared folder. The work around is for someone else on a different computer to open the psd in an older version of Photshop, and resave it with a different name (adding a v2) and then it opens smoothly on my end.
I am running OS 12.4 on an M1 laptop, with Photoshop 28.3.2
My finder displays the preview thumbnail. The file shows "weight" in MB; in that dropbox has downloaded it locally. It was not a .tiff mistakenly saved with a .psd extension.
Unfortunately when I asked the remote person to tell me what older version of photoshop she had, it updated, and she has no idea what it was.
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Only documents saved in Dropbox?
Do try saving as TIFF instead of PSD (you lose nothing doing so).
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I even copied the file to my desktop, but it still wouldn't open. I have a feeling something is being lost or takes time to update (even for a 4MB file) in the process of dropbox's "smart sync" option.
I'll attach the file saved to my desktop here. It currently won't open and displays the message on my computer.
Oh... lol even trying to attach it to this post resulted in this message in this forum (see attached).
Here is a download link to the small .psd file in https://we.tl/t-ORrhWmVjYsquestion:
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Have you checked that your apps are properly added to Full Disk Access in your System Preferences > Security&Privacy?
Also check under Files and Folders.... sometimes an app will be listed here (if not given Full Disk Access) but without some options checked. Monterey is being notorious about resetting these options.
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i gave Photoshop full access but it wont open this file: https://we.tl/t-ORrhWmVjYsquestion