I've been syncing Keyboard Maestro with Dropbox for (I don't know how many years but a very long time). I've very rarely had any issues and when I have it's user error - not waiting for a sync to complete maybe. And when I have had an issue the recovery is simple (see below).
I've always just used the Keyboard Maestro Preferences to turn syncing on and pointed it at the Dropbox folder I want to save to. No clever setups and I have several Macs in different locations as well as my MacBook.
Dropbox has 2 good features (which I don't think are in iCloud).
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If there is any doubt what file should be the correct one it makes a safety copy. It calls it something with "conflicted copy" in the name. So you always have the option to simply rename the file to make it the current version. While the files have "conflicted copy" in the name Keyboard Maestro just ignores them so, they can happily sit there doing no harm.
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Dropbox (for me at least since I pay them) it has versions. I don't think the free Dropbox has this. But Dropbox versions have saved me from disasters.
(EDIT - Dropbox keeps a version of every changed file so, it is possible to restore to a previous version. How long it stores the versions for is down to what kind of package you pay for - but it is at least a month. I double-checked yesterday and iCloud does not store versions.)
iCloud syncing was never as good as Dropbox in the early days (which is why I stuck with Dropbox). But now (for inbuilt Apps like Photos, Calendar, Notes, Contacts, Shortcuts, text expansion) iCloud seems very solid. I've just never switched over to using it for Keyboard Maestro.