Any app that stores files in iCloud Drive has a fully user-accessible chunk of filesystem; it has to give the files meaningful names and properly handle files being renamed, added, etc. from the iCloud Drive app or file picker.

So they have to deal with arbitrary filenames; on the other hand, for the same reason, they can't maintain a master list of files somewhere which would break, but have to check the actual directory contents instead. Still, things like history or links between files might be broken.

That is, unless NSFileCoordination APIs act differently wrt normalization; iCloud clients have to use those rather than accessing the filesystem directly.