Nextcloud asked in a poll at https://mastodon.social/@nextcloud@mastodon.xyz/115095096413238457 what database its users are running. Interestingly one fifth replied they don’t know. Should people know better where their data is stored, or is it a good thing everything is running so smoothly people don’t need to know what their software stack is built upon?
SQLite is a proper database. Realistically you’ll never exhaust its 278tb storage limits, it’s thoroughly battle tested, and it’s dead easy to backup.
I doubt nextcloud is running enough parallel db writes for this to actually matter — and if it is WAL mode is still probably good enough.
Once you have multiple software clients running then you will need a client server dbms like Postgres. For most home or group installations, this should not be an issue.