I think a user does care if they can’t easily know if a document is on the cloud. Like you’re at a conference where you discover your desktop wasn’t saving to the cloud for some reason. The interface is identical between cases.
That is a UI problem. Overlay icon or something like it - or setting to make sure all documents are also present on your machine. I absolutely do not want to know how it's implemented and where to look if it's cloud or not.
As a developer I would settle for accurate and comprehensive documentation.