It fixed itself after the 1.4.20 update. I applied the 1.4.20 and after the boot all contacts were in place and sync worked flawlessly. I did not have to create an account.

I am absolutely positive about this diagnosis: didn't work before 1.4.20, as described, worked 100% after. With same account settings.

I am sorry for not returning to my post(s) and clarifying this right away.

Some more discussion here: https://together.jolla.com/question/...nd-no-two-way/