How to sync specific folders & files on Desktop to iCloud?

There is currently no option to do that for the Desktop. If you have the iCloud Drive Desktop & Documents option turned on then everything in the Desktop and the Documents folder will sync to iCloud.

Workarounds are to either 1) put files and folders that you don't want to sync somewhere else in your user directory (i.e., not in Desktop or Documents) or 2) turn off the Desktop and Documents option and put files that you do want to sync in the iCloud Drive folder. That folder can be accessed via the Finder "Go" menu and it can also be added to the Finder sidebar. If you decided to turn off Desktop & Documents, see the "Turn off Desktop and Documents" section of the following first: Add your Desktop and Documents files to iCloud Drive - Apple Support

You can use brute force to keep certain folders local. If you add the filename extension .nosync to the name of a folder on your Desktop, it will not be synced to iCloud and stay local. You will see a crossed out cloud badge behind the filename in the Finder.

When iCloud Drive and desktops and documents box is turned as on https://support.apple.com/en-in/guide/mac-help/mchle5a61431/10.14/mac/10.14

The complete files / documents are synced to iCloud server , however some files / documents can be moved to some other location see the article https://support.apple.com/en-in/guide/mac-help/mchl1a02d711/mac

And as per this article https://support.apple.com/lv-lv/guide/mac-help/mchlp2304/mac

When you rename a file or folder, don’t change its filename extension, or you may no longer be able to open the file with the app that was used to create it.