document library – OneDrive Sync with SharePoint is showing the files in Read-Only mode

We have a document library inside our online classic team site, and it has a custom content type which mimic the built-in Document content type:-

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Also we have the following versioning settings:-

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Now users are able to sync the SharePoint library with OneDrvie, but the synced files will be in Read-Only mode. can anyone advice on this?

Thanks