Just thought I would mentions this. I'm running O3X 2.1.6 on Intel Monterey (under manually configured OpenCore, if it matters). My everyday user's home folder resides on an encrypted zfs dataset; I boot first to an admin user, decrypt the ZFS dataset, then log into the everyday user.
The bug: I can save a brand new TextEdit file to a directory under my home folder to, say, ~/Documents. However, when I then make changes to that file and try to save it again, it gives me a permission error: "The document XXX.rtf could not be saved. You don't have permission. To view or change permissions yada yada yada." The TextEdit program must be using some weird call when saving or overwriting an existing file. I don't have this problem with an alternate text editor (LibreOffice), even creating and/or saving to the same directory where TextEdit doesn't work. So it doesn't seem to be a true permissions problem (I've also looked at the permissions of the destination folder, and my user has read and write permission, group Staff has read permission, and everyone has read permission).
Holding down the option key I can do a "Save As" on the file that I can't do a regular Save on.