What is this iCloud Drive icon mean?

See the following from Get file, folder, and disk information on Mac - Apple Support

• Pie chart: The pie chart status icon  gradually increases from clear to dark as the files are transferred.
• The same pie chart can also appear next to iCloud Drive in the sidebar, where it indicates the overall progress for files transferring to and from iCloud Drive.

You might try restarting; not sure that'll update the icon it but worth a try.