Documents folder emptied by iCloud?

Hello SVO,

Thank you for using Apple Support Communities. If you notice that you're missing files after performing an update, you can recover those items with the help of Time Machine. It's always recommended to backup your data prior to performing any new update. If you were using Time Machine, you can follow the steps listed here to recover missing items: Restore items backed up with Time Machine on Mac - Apple Support

1.) On your Mac, open a window for the item you want to restore.

For example, to recover a file you accidentally deleted from your Documents folder, open the Documents folder.

If you’re missing an item from the desktop, you don’t need to open a window.

2.) Use Launchpad to view and open apps on Mac and open Time Machine (in the Other folder). A message may appear while your Mac connects to the backup disk.

3.) Use the arrows and timeline to browse the local snapshots and backups.If you see a pulsing light to semi-dark gray tick mark, it represents a backup that’s still loading or validating on the backup disk.

4.) Select one or more items you want to restore (these can include folders or your entire disk), then click Restore. Restored items return to their original location. For example, if an item was in the Documents folder, it’s returned to the Documents folder.

We hope these steps are helpful. Thank you for using Apple Support Communities.

I have a similar problem, except (and you might notice this yourself)

1. All your Desktop and Documents Folder data is on your computer in /Users/username/iCloud Drive (Archived)
2. If you click on /Users/username/Desktop it says Desktop — Local (similarly, /Users/username/Documents will say Documents — Local)

I too cannot get the Settings/iCloud/iCloud Drive Desktop & Documents slider to stick.

I am running Ventura.

...although I think that the original poster's screen shot is not from Ventura. I cannot find that particular menu in Ventura's settings.