I understand the desire to have a seamless flow from free to paid, but you can easily move this flow later in the app (a la progressive disclosure). You can even build this into the existing flow where users currently go to upgrade, by prompting the user to create a Nylas ID at that point (if they haven't already).

There's a reason that e-commerce sites allow buyers to add items to a cart without sign up, and to "checkout as guest" instead of forcing users to sign up for a Staples (or whatever) login -- you get more conversions.

Even if you prefer the approach of trying to get the information up front, adding a "skip" option that allows users to use the app without cloud sync, etc., then allowing a user to "go pro" later on at least allows people to try the app without a commitment. It's not possible to convert someone who isn't a user because they got scared away by the registration requirement -- better imo, to have a non-registered user, than no user at all.

The only reason I could think of for not wanting to allow this is related to the third party data sharing -- perhaps you plan to sell (obfuscated) user data to data brokers. If that's not in the cards, and you do not plan to monetize your free tier (aside from up-selling to pro), I see no downside to allowing users to use the app without cloud sync in the free tier, with upgrades available within the app.

Updating the privacy policy to be explicit about what data is used for ("basic usage and performance statistics") would do a lot to allay the idea that this data is being sold to data brokers (and not simply to make the app better).