It appears this is related to the Background App Refresh function. On my device this was set on and I turned off all individual apps and then the main Settings > General > Background App Refresh option. I shutdown the device completely - after also turning off Bluetooth and WiFi and putting it into Airplane mode - and re-started and hey presto voila no more blue icon😊
iPad Air (5th generation)
The icon indicates that your iPad is performing synchronisation. Appearance of the icon is benign - and will disappear of its own accord when the task completes.
At present, pending confirmation by Apple, this appearance of the icon is believed to have some relationship to post-update synchronisation tasks performed by your iPad after updating to iPadOS 18.x (such as downloading Apple Intelligence LLM models) - or the icon appears while a download is being performed as a background task.
Apple have not yet provided a definitive explanation.
Apple's documentation is often slow to catch-up with new features. Here is another status icon - that appears briefly when connecting some USB-C hubs - that Apple have yet to add to their documentation:
The blue icon in the top corner with a white circle and 2 curved arrows
