How to enable file sharing for the new 'private' folders in Catalina?

The new data protections in Catalina make some folders inaccessible by default (for example the 'Documents' folder). When an application tries to access one of these folders the OS presents the user with a dialog box to ensure they intended the access.

See the Data Protections section here.

This seems to have had the effect of breaking home folder network shares. If you enable file sharing in macOS, any registered user is able to access their home folder using their own credentials. This works in Catalina, but the special private folders (Documents, Downloads, Desktop) can't be interacted with. Attempts to interact with them result in an 'access denied' error and no dialog is presented to the user on the server machine that would allow access. On the client machine, in both Finder and Terminal these folders simply appear empty and you get a permissions error if you attempt to create a file.

I can see no configuration in either the Security and Privacy settings for these files or in the File Sharing settings that would solve this problem.

How do I allow access to these folders as part of the user's home share over a network in Catalina such that it works as it did in previous versions of macOS?

This is probably a bug. You can solve it by deactivating the file sharing option in the Sharing section of the Preferences window and then reactivating it.