If you have iCloud Desktop and Documents turned on, the Documents folder is moved to the iCloud section of the Favorites in the Folder sidebar.
That doesn't necessarily indicate that there isn't a local copy (on your Mac) of the documents in that folder. If you haven't turned on Apple menu > System Settings > [username] > iCloud > Drive > Optimize Mac Storage there is always a local copy of all of the iCloud Drive files on your Mac. You access them using the Documents folder that is shown in the iCloud section of the Finder sidebar. Even if Optimize Mac Storage is turned on there may be a local copy if there is enough storage space on your Mac. If you aren't sure whether there is a local copy of a file, see the "View iCloud Status" section of Get file, folder, and disk information on Mac - Apple Support
If you want to turn off the Deskto & Documents option of iCloud Drive, see the following from Add your Desktop and Documents files to iCloud Drive - Apple Support
Turn off Desktop and Documents
- From your Mac, choose Apple menu > System Settings.
- Click Apple Account. In macOS Sonoma or earlier, click Apple ID.
- Click iCloud.
- Under Saved to iCloud, click Drive. In macOS Sonoma or earlier, under Apps Using iCloud, click iCloud Drive.
- Turn off Desktop & Documents Folders.
- Click Done.
What happens when you turn off Desktop and Documents
When you turn off Desktop & Documents Folders, your files stay in iCloud Drive and a new Desktop and Documents folder is created on your Mac in the home folder. You can move files from iCloud Drive to your Mac as you need them, or select all of your files and drag them to the place you want to keep them.
or, if you want to completely turn off iCloud Drive, you can also do that at Apple menu > System Settings > [username] > iCloud > Drive > Sync This Mac and see the following from Add your Desktop and Documents files to iCloud Drive - Apple Support
What happens when you turn off iCloud Drive or sign out of iCloud
If you turn off iCloud Drive or sign out of iCloud, a new Desktop and Documents folder is created in your home folder. You also have the option to keep a local copy of your files that are in iCloud Drive. If you keep a local copy of your files in iCloud Drive, they're copied to a folder called iCloud Drive (Archive) in your home folder. You can move any files that were in your iCloud Desktop and Documents to your new local Desktop and Documents.
