[UPDATE: I have now encountered this twice, so I added my second solution.] But spoiler alert...I'm pretty positive the issue stems from saving my Desktop and Documents folders in iCloud 🙄
The first time this happened for me, the following steps helped:
It looks like this is an issue related to the new folder permissions in Catalina. When I open System Preferences > Security & Privacy > Privacy > Files and Folders, I see that Xcode appears to have permission to see the pertinent folders. I used VS Code for something else earlier today and it also prompted to ask for access to iCloud Drive. I'm not sure why, but Xcode only shows permission for Desktop and Documents.
How I was able to fix the issue, is that I went to the 'Derived Data' folder for Xcode.
If you're unsure how to do that, here are the steps I did:
After doing that, I was able to successfully open all my projects. Hopefully this works for you, but let me know if you have any different experiences or if you get stuck anywhere. Good luck!
I encountered the issue again after updating to beta 5, and doing the above steps did not work for me. I also tried removing my GitHub account, which also didn't help. Here is how I fixed it the second time:
I turned off iCloud Drive in my settings and actually removed everything from my computer from iCloud Drive (for me, it's the Desktop and Documents folders that sync to iCloud). After a while I turned it back on and played with the settings a bit. I then downloaded all the files in my Desktop and Documents folders (from iCloud).
[I'm not sure if this next part was actually part of the solution, but I'm going to just include it anyway since I only noticed it working after I did this...but I suspect that it just took a while for the files to download]
I then turned off permission for Xcode to access the Desktop and Documents folders.
Here is a screenshot for where "Files and Folders" lives:
It didn't ask for permission again, but I forgot about unchecking all the boxes. Then, for some incredibly strange reason...Xcode magically worked again and opened my files. I suspect it was something weird with iCloud and that I finally had downloaded the files I needed for the specific project I've been trying to work on. Later on it wouldn't let me edit the files because I didn't have permission, so I went back to System Preferences and turned on permission for Xcode to access those folders. Everything seems to be in perfect working order now!