macOS Triggering folder action on dropbox folder?

You may need to try a different tactic like setting up a cron job with a script to monitor the folder, check for new files, and then do the conversion.

Alternatively, it may be easier just to set up a cron job or rsync to move the file from the dropbox folder to another staging folder, and then have the folder action trigger there, assuming that rsync or a cron job+move file combo triggers folder actions

I don't know, honestly. I would hazard a guess that whatever process monitors a folder for folder actions is NOT the process that dropbox uses to write files. Or more specifically, folder actions are probably handled by the finder process (which is always running), but dropbox just writes to the folder directly using the underlying os filesystem hooks and so finder never gets notified.

It's possible that rsync or a cronjob copy wouldn't work either. You may need to write a full script to check for new files and then do the processing, and set that up on a cron job.

There is also a program called Hazel that is similar to folder actions that might work the way you want.

Food for thought....