I'd like to add to this question as I am also having a hard time clarifying some of these fundamentals of the sync options.
For example if I have changed my Enpass "data location" to my Nextcloud folder. (Which is cloud synced on its own) Should I not turn sync options on at all? This pertains to @rntomee question as if he just changes his "data location" to any "network synced folder" would he still turn folder sync on or just leave it off and let the folder sync on its own.
Also looking at the Enpass manual it states several ambiguous details about Sync creating an automatic backup and this statement...
"The syncing of data is always performed offline on device, after the encrypted file is downloaded from remote cloud. Then the new encrypted file is pushed back to the cloud."
So is the sync setting creating a separate file first with the changes for sync , then using that to update your Enpass data file? If so then possibly the set-up I have suggested above, with the Enpass "data location" being the same as the "network or cloud synced folder" would cause conflict or corruption because both files "Sync-file" and "Data-File" would be changing at the same time?