Hi @Lough01, thanks for messaging the Community!
It sounds like the PDFs are being moved to iCloud first, replacing the file with a placeholder as the original is uploaded to their servers. When you remove the .icloud extension, this won't bring back the file from iCloud, since the placeholder has no data on it.
Could you check if your iCloud settings are somehow affecting the files in the Dropbox folder?
Let me know how it goes!