They are in the sidebar under your Home location in a folder called Recovered files. Just copy them into they're proper iCloud location and you will see them uploading again. I got everything fixed already on the public beta. I don't know what change they made or if it had anything to do with on the last beta the folder icons were missing for Documents & Desktop. And also iCloud Drive was broken in 3rd party apps on last beta. Seems to be fixed on this beta but claiming no permission to open location in 3rd party apps like Forklift.
I also copied the entire Recovered Files folder to an external drive to have a backup of incase things change or get screwed up again but I notice that the upload to iCloud is going very very slow....
It's also in the release notes...
- After updating to macOS Catalina 10.15 Beta 7 or later, iCloud Drive might synchronize for an extended period of time. If you notice any missing files, they can be found inside a Recovered Files folder in your home folder. (54046219)