Now that I am in it, how do I get out of iCloud Drive documents?

If you see the files in Finder/iCloud Drive, copy them back to your computer to a location other than Documents, then turn off the option to sync them. You should then be able to put the files where you want.

After installing Sierra, I went to settings -> iCloud -> iCloud Drive Options. There I chose "Desktop and Document folders" and I disabled "Optimize Mac Storage".

What happened is that my Desktop and Documents folders were moved under iCloud in Finder BUT I can still access those files offline. I don't need access to the internet to work with the files in Documents folder in iCloud.

I understood it works so that if you work with your documents while offline, those changes will be automatically synchronized to iCloud when you connect to the internet.

If you choose "Optimize Mac Storage" in the settings, that will start deleting older files from your local hard drive but only if you haven't used them for quite some time and if you began to run out of disk space. Those "optimized" files you can access only when connected to the Internet.

I'm having the same issue. I feel like I got hoodwinked on this one. I had understood that the copies would be available both on desktop and they would be synced to files in iCloud. Now I'm caught in upload ****.

Enabling iCloud Drive alone does not "move" files to the cloud.

Did you also enable any of the new optimization features?

Save storage space on your Mac - Apple Support

I don't remember doing that but I saw that it had been turned on, so I turned it off. I think I've managed to halt the atrocity by the old-fashioned drag and drop routine. Sorry, I just don't trust online storage. Too many tales of hacked accounts and things gone bad. I thought I had more control over this option but it just brut-grabbed everything and hauled off with it. I've turned everything off. Lesson learned. Hopefully without having lost any files.