iCloud Desktop Syncing Issue After Transferring Files

Issue:

I recently transferred all my local download files (approximately 12GB) to the iCloud download folder and set default download location to iCloud download folder. After the transfer, I noticed that these files suddenly appeared in my iCloud Desktop folder, which is synced with my MacBook. This has made my desktop look cluttered and messy.

Steps Taken:

1. Originally, I stored all download files in a local download folder.
2. I transferred these files to iCloud download folder and set it as default download folder.
3. After transferring, the transferred files suddenly appeared in my iCloud Desktop folder on my MacBook.
4. When I checked the iCloud Desktop folder via Safari, it looked normal and unchanged. IPhone files apps looks normal as well.

Question:

Why did these files appear in my iCloud Desktop folder, and how can I resolve this issue to keep my iCloud Desktop organized and synced properly with my MacBook? Originally my desktop has limited files.