Android client autoupload failes to upload files from SD: local storage full

I moved from Motorola Moto G5 go latest Redmi Note 5 (Xiaomi).
Nextcloud android client cannot upload photos using instantupload (auto upload / instant upload) feature.

It returns the following error on phone’s notification screen: “failed to copy to local folder /InstantUpload/Camera”. And retries every few minutes with the same result always.

However on the sent files list in the nextcloud app itself (menu -> auto upload -> sent files list) the failure reason is different (shown below each file name): “local memory full”. I am not sure if the english sounding of this error message is correct, I have translated it from polish version. the polish sounding of those error messages is: “IMG_xxxxx.jpg nie może zostać skopiowany do lokalnego katalogu…”
and “Pamięć lokalna pełna” respectively.

Is seems that the app thinks that the disk is full. And in reality the SD card is both huge (128GB) and almost empty.

Nextcloud app is set as autostart application and excluded from battery optimization (the battery optimization policy for this app is set to “No limits”. Access to “memory” for the Nextapp also granted.

When I go into NextCloud app itself, navigate to /InstantUpload/Camara folder on the server, and then press the “+” to send files: when I am selecing files than on the bottom there is a message always present on screen: "Source folder is read olny, file will be only sent. I am not sure if this is relevant but also weird.

Copying/ moving around the same files from phone using Total Commander apk - works ok without any problems. Even moving files from “CAMERA” folder.