Hey @imroue thanks for bringing this issue up again!
I quickly tried it out and was able to reproduce your issue. It seems that iOS itself shows this message and hinders you from accessing the files. This is probably because we tell the files app that the file has not been downloaded yet - that’s also the reason why you see the cloud icon next to each item. Which is more or less correct as we do not distinguish between local storage and for example iCloud or any other location which you can select via the „other file provider“ option.
We could try to detect this case so that we just mark all files as downloaded if your vault is stored locally at „On my iPhone“.