Can I disable iCloud backup of my desktop and documents without erasing all of those items?

I am new to mac and using a brand new iMac with macOS Catalina.

Just a couple weeks in I've started seeing "Out of Space" errors below files and folders in Finder which was a bit surprising as I have barely touched my hard drive capacity. Digging around I discovered that it's actually iCloud that's full.

I tried going into preferences and unchecking the checkbox for iCloud syncing my desktop and documents. When I unchecked the box I got:

"If you continue, items will be removed ..."

I have to erase my desktop and documents or else I have to pay for a subscription to make these warnings go away?

Another way to look at this is this:

In the regular course of using my machine I exceeded 5 GB (Less than half a percent of my 2TB drive space) and because of this mistake, I am now faced with three choices:

1. Ignore tons of warnings from the operating system
2. Pay for an iCloud plan
3. Erase the entirety of my desktop and documents and then recover it again from a service I've never used.

This is a bizarre design. It feels like a slimy tactic to get new users onboarded to iCloud. A user's desktop and documents will quickly exceed 5GB, I'd expect. These are not contacts, calendars, reminders, etc. which are tiny.

Is there truly no option to turn off iCloud syncing to my desktop and documents that does not erase those desktop and documents? I've already exceeded the 5GB limit of iCloud or I wouldn't be experiencing this, so what happens to all those items that exceeded the storage capacity after I erase everything? Surely they can't be all backed up to iCloud.

If erasing is the only option here, then I don't think it's right to have this feature enabled by default. It deserves a warning when you try to enable it: "Are you sure you want to enable iCloud syncing for desktop and documents? You will not be able to change your mind later or control what gets uploaded, unless you completely erase all your desktop and documents on this computer." I think that warning would make a lot of people realize they don't actually want iCloud enabled on their desktop and documents because they know they'll exceed the free usage limit. Instead, it's enabled by default and users have to discover the hard way that disabling it is no easy task and it's a process that can result in data loss.