What the OP describes works now from iOS Files with .md files to Byword. The first time I had to explicitly share an .md file to Byword (from an iCloud directory accessed via the Files app Share/"Open in Byword"). Now anytime I tap on a .md file in Files (again, a file stored on iCloud in my case) it opens in Byword by default, I can edit it and the file remains in iCloud/Files (as far as the user experience is concerned). Edits are saved. I can open the same file up moments later in the iCloud synced folder on my Mac and the changes are there.
I'm not advocating Byword (though it is quite nice as far as it goes), I'm pointing out from their example that this is possible. I'd like to second the vote for Editorial to be able to do this. I'd like an "Open in Editorial" option in the sharing preferences (not "Copy to") in Files and then for .md files to open in Editorial by default (with edits automatically saved back to the same file in Files/iCloud). I'm not sure if what Byword has done is easy or available to other text editing apps, but I'm hoping it is because I really want to do this with Editorial.
