Restore Access to File System for Emacs on MacOS Catalina
I solved the problem by granting Full Disk Access to /usr/bin/ruby as suggested here. Quoting from the reply,


  Emacs.app actually launches using a ruby script. As a result, MacOS Catalina uses the permissions set for ruby, not the permissions for Emacs.app.


Grant access as follows.


Go to "System Preferences -> Security &amp; Privacy -> Privacy"
Select Full Disk Access from the left menu. It is about half way down in the menu. A list of apps will appear in the main region of the window.
Click the lock on the lower left and authenticate in order to allow making changes.
Click the + button under the list of software and select /usr/bin/ruby.


/usr is usually a hidden folder and may not appear by default. If so, press shift+cmd+. (the last one is a dot) at the root directory to make it appear.



Emacs.app should now be able to access the file system without any hindrance!