Any fix for this? Ran into the same issue after migrating from an Intel mac where I had symlinked ~/Desktop to my ~/Dropbox folder. Now stuck with a symlink flagged as schg that can't be deleted (so I can't go back to a stock Apple Desktop folder location if I wanted to), and also blocking Spotlight from indexing anything under it. Have tried the Terminal in Recovery mode also, no luck, as well as disabling System Integrity Protection, and Safe mode and various combinations. Feeling like the only fix is going to be wiping the hard drive and starting over, which is a bummer since the migration was so effortless.

Go go undocumented switches on chflags! Found this which actually works: sudo chflags -hv noschg [Path}