What does it mean when there is no iCloud icon next to a file? Or when the icon is just indicated next to a folder?

The Backstory:

We had an incident last week when all the folders on the macbook air suddenly disappeared. When I managed to get folders back on the desktop they were empty. The time machine was backing up once a day, so I managed - after about 8 hrs - to painstakingly find most of the documents that had been in the folders. However, there were about a dozen I could not find (word docs) because they had been created between 7am and 10am.

So, my question has to do with iCloud icons. I understand what the icons mean ie with an arrow, no arrow, slash and so forth. What does it mean when a file has nothing next to it? If I go to a folder with no icon next to it, but I open that folder, I see files in that folder that have clouds next to them (sometimes). But, there is no icon next to the folder. And I have files that have no icon next to them, but according to the iCloud Drive, they are in the iCloud. Very confusing. And we don't want to deal with this again ... I have Time M now set for every hour, but I know that probably is going cause issues at some point since it will most likely fill up..

So, what does it mean if a document has no icon next to it, but it is in a folder that supposedly is in the iCloud. And what does it mean to have a file that doesn't have any icon next to it?

Is it synced and in the cloud? If I work on that document and close it, and re open, are my changes saved? I have desktop and documents option to be in the iCloud and optimize chosen.