Don’t be put off: they still work correctly.
The only remaining glitch is that Sierra 10.12 often shows folder aliases as if they were documents. You may also find that, once an old app has accessed your iCloud Drive via aliases, it then decides to add iCloud Drive to your list of favourites! With those aliases in place in Documents, you can now open and save to files on your iCloud Drive in Office 2011 and most other older apps, just as if the aliased folder was on your internal drive. Move that alias into your local Documents folder: because that will remove the alias from iCloud Drive, you’ll see a warning that the aliases will be deleted. Select each, and use the contextual menu (or any other method) to make an alias to the folder. Let’s say we have two folders in our iCloud Drive named Excel and Word, to contain documents shared with other Macs or iOS devices using the same iCloud account.
Sierra’s file open and save dialogs should include your iCloud Drive in the list of favourites on the left (as shown above), but Office 2011 and many other older apps may not give direct access to files in your iCloud Drive. This is not a heart-warming experience, but it gets by. However, the cursor keys do function normally, so you can use them to traverse folders and files. Negotiating file open and save dialogs in Office 2011 apps running under Sierra is kludgy: trackpad controls move the pointer, but the pointer doesn’t let you navigate the folder and file view within the dialog.
But you have to pay the subscription to Microsoft, as well as paying Apple for your iCloud storage. Couple them with the iOS versions, and you can use iCloud for all your shared Office tasks. If you fancy paying a monthly subscription and upgrading to Office 365, its component apps do work well now with iCloud Drive. There are plenty of apps, like Microsoft Word 2011 and the other components of Office 2011, which work quite well still in Sierra, but whose file open and save dialogs don’t work properly, and which don’t give access to iCloud Drive.