Another iCloud+ shoe dropped in iOS 16.2, iPadOS 16.2 and macOS 13.1.
  1. The first shoe was Advanced Data Protection which provides full encryption of everything on iCloud that even Apple cannot break. (Of course I had to turn it on and it has been 100% transparent in operation.)
  2. Now Apple has added Managed iCloud Data Access. The concept is sound, but a lot of iCloud settings have either gone away, been moved, changed, have had conditions imposed, and new items added.
  3. confused

I literally stumbled over all of this a couple of hours ago, and I am still working through all of the changes and implications (which isn't helped by the fact that in the beta the "More info...'" links all point to this page shocked ) but suffice it to say the boundary between the local drive and the iCloud drive are becoming so thin they are approaching invisibility. There is even an apparently new Backups item that I am attempting to work my way around.

If there is any doubt about the direction Apple is headed in, the description of Optimize Mac Storage now reads
Originally Posted by apple
Optimize Mac Storage
The full contents of the iCloud Drive will be stored on this Mac if you have
enough space. Older documents will be stored only in iCloud when space {on the local drive} is
(emphasis and editorial insert mine)

It appears the design assumption is all of your documents will be on the iCloud Drive and only the most active will be on your local drive. This is further emphasized by the LOGICAL system displayed in Finder and the GUI (as opposed to the carefully hidden physical organization).

"Sacred cows make the best hamburger"

- Mark Twain