Documents folder suddenly moved to iCloud

With the latest update to MacOS V12.3.1 on my MacBook Pro M1, favorites bar on the let side suddenly changed. What's really bad is that my Documents folder suddenly moved to iCloud. What is worse is that I can't move it back to the local drive. So applications are now corrupt.

I knew when I bought this MacBook that there would be bugs and corruption with the new M1 chips, but this is completely unacceptable. How do I fix this?

Dan.

p.s. I am EXTREMELY disappointed with Apple in general and my MacBook in general.