Your system information

• Steam client version (build number or date): Jan 1 2021 (discovered the described issue earlier)
• Distribution (e.g. Ubuntu): Manjaro
• Opted into Steam client beta?: Yes
• Have you checked for system updates?: Yes

Please describe your issue in as much detail as possible:

While Steam Cloud is syncing a game with large save files (in my case Factorio) through a slow connection, i can't run another game (that also makes use of the Steam Cloud) as Steam just opens a dialog box "Preparing to launch..." and stops the game from running until the sync is finished.
To be sure, I have turned on the setting "Allow downloads during gameplay" globally, but it doesn't seem to affect the Steam Cloud sync.

I know i can just disable Steam Cloud manually for any game, or wait for the synchronization to finish, but it just shouldn't work like that.

Steps for reproducing this issue:

1. While Steam synchronizes a large amount of Steam Cloud save data
2. Try to run another game making use of the Steam Cloud (e.g. TF2 or L4D2; the issue doesn't affect non-Cloud games)
3. Steam will open a dialog box "Preparing to launch...", and you will have to wait until the sync finishes, then the game will launch.