This exact method of combining Cryptomator and Syncthing for Obsidian E2EE sync just came out from a chatbot, which means someone somewhere wrote this "originally" without stating which threat model this is for.
They also seem to have confused public cloud service provider, which users have no control on security, with self-host which users have.
> Quick Start Example: Cryptomator + Syncthing
Install Cryptomator on all devices.
Create a new vault called ObsidianVault.
Inside the mounted Cryptomator drive, create or move your Obsidian vault folder.
Install Syncthing and add the Cryptomator vault’s hidden folder (the .vault directory) as a synced folder.
On each device, start Cryptomator, unlock the vault with the same password, and open the vault in Obsidian.
Syncthing now synchronizes the encrypted .vault files; your notes stay private.