Ok, it turns out that this isn't BackBlaze's fault.
I looked at the rclone changelog to see what changed since rclone 1-2 versions prior, and this is maybe what's going on: something changed with respect to symlinks in --copy-links not following symlinks on 1.60.0 - #5 by Animosity022
That's cause my source is a symlink and that was working fine for a year and all of a sudden it no longer is.
Anyway I need to dig deeper to figure out exactly what's going on.