That seems to be pretty clearly what this article is saying.
And it's a goddamm disaster if that's the case.
I just tried that (https://news.ycombinator.com/item?id=9888649) and it finished syncing the moved files.
So no harm done and it even appeared in the iCloud.com Settings > Data & Security where I could recover it.
It's possible they fixed it or it's isolated to specific versions.
That was what happened to a friend of mine. And I reproduced it reliably, with data loss.