Why do Catalina and later Mac's local folders Desktop, Documents, etc. appear empty (but aren't) over File Sharing?
Answering my own question so others won't lose half their day and all of their hair.
It's because Catalina introduced data protections that breaks Samba (SMB) File Sharing access to the local folders Desktop, Documents and Downloads even when logged in with credentials of the registers user/owner of that account.
To correct this, you must give the 'smbd' app full disk access on the Mac doing the File Sharing:
- Open and unlock System Preferences > Privacy & Security > Full Disk Access (System Settings in Ventura)
- Browse to /usr/sbin via the Finder menu "Go > Go to Folder ..." (or click Desktop and press shift+command+G)
- Find and drag the 'smbd' app to the Full Disk Access pane
- Force Quit the Finder on both the File Sharing Mac and the one networking in (if needed reboot instead)
Voila, your missing files in the local folders should now all be listed and available.
It's maddening Apple doesn't add the smbd app automatically when File Sharing is enabled.
Hope this save someone's sanity.
Good luck.