I have the same problem. I am on a MAC Powerbook. High Sierra, 10.13.3. Spotify 1.0.75.483.g7ff4a0dc, Premium Account.
I can see local files listed, but they won't play. If I add a new location those files do not appear, although I can search for them and find them. But can't play nor add to play list nor queue. I changed the settings and removed itunes and the download folders, but those stayed listed and when I added a new folder those files did not appear, so I am thinking the list does not refresh. When I close Spotify and reopen it that does not help. Have not yet tried restarting computer. Will do that next. It it works, I'll come back and report that. If not, I won't.
Hey folks!
We're closing this thread since we haven't heard back from you in a while.
Don't hesitate to open a new one if anything else comes up.
All the best.