Not able to replicate this myself but have had a couple of users report this. I have a Finder Sync Extension. It does not, at least intentionally, change any sidebar icons. The hosting app mostly uses asset catalogs and the icon file it specifies in its info.plist is a icns file, not an iconset.
Any idea what may be causing this? Seems odd to me that there isn't some explicit setting to enable this instead of requiring some set of configurations lining up.