I was able to get things syncing reliably between Macs today running internal TestFlight builds after adding CloudKit.Framework to the app target's "Frameworks, Libraries, and Embedded Content" section as described in this thread.. Once that was set, creating/editing a Project record would sync between the TestFlight apps. I then noticed that creating/editing a related TimeEntry record would cause syncing to completely stop in either direction. I then discovered that only my Project records type had been deployed to Development on the iCloud Console; while TimeEntry had not been deployed for some reason. I re-deployed schema changes from development to production on iCloud Console, and now Project and TimeEntry record types show in iCloud Console in production. Syncing now works for creating/editing/deleting Project and TimeEntry records. So all is syncing well in my Internal TestFlight builds now. Thank you, Ziqiao, for the links. I'm sure those would be helpful if I was still having issues.

Also, in the situation of running the apps from Xcode on each Mac, it seems that edits on one Mac do not reliably show very quickly from one Mac to another when the second Mac app is just sitting/wating in foreground. But, if I background and then foreground the app on the second Mac, the edits do then sync and display in the UI. Perhaps this is some limitation of when apps can trigger/receive push from iCloud while running in Debug from Xcode?

Forgot to mention Mac 1: macOS 15.7.2, Xcode 26.2 Mac 2: macOS 15.7.3, Xcode 26.2