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Yes, it gets synched just like any other file inside my Nextcloud. However, if you have to often change the data inside, it might not be a suitable solution, since the file has to be uploaded as a whole. If it's a big container, it might be cumbersome to upload a few gig each time you make a small change.
Yes. Cryptomator is better in this regard.
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Do you run it at your home or on some VPS? If the latter, and if you don't mind my asking, where do you find affordable storage for your VPS? The biggest hurdle for me to use Nextcloud is that attaching a large storage to a VPS seems to be quite a bit more expensive than using Google drive, etc. My current VPS is on DigitalOcean, which asks for $100/month for 1TB storage. (To be fair to DO, the storage is SSD, but in…
what are the drawbacks for you to run it in a home server?