Hey Dan!
iCloud Drive is always working to upload and download your files to and from iCloud.
So they are either in one location or both, if your Mac storage is totally full, and you have the Optimize Storage option enabled, some may not be fully downloaded or uploaded.
From my experience, it’s been totally safe to select the option to “Stop uploading and turn off”.
When you choose to keep a copy of your iCloud Drive data when disabling it, or by signing out, it creates a new folder on your Mac in Finder > Go > Home, called iCloud Drive Archive, with all of your data as a backup. However, your backup remains in iCloud if you have other devices syncing the documents, and even if you don’t, it will remain there for an addition 30 days I believe for you to download them if needed.
If you want to be extra careful, and that process just stalls forever, you can:
Open Finder > iCloud Drive in the Finder window, select all the contents, copy them and paste them into another folder on your hard drive, it May ask you if you want to move the data from iCloud, select yes, (Just as signing out, the data is still safe in iCloud),
Doing this, is similar to just signing out and choosing to keep a copy of the data, only difference is you choose the location to store it and it doesn’t automatically download to your Home folder.
Note, you can also, if you need to even download your documents from iCloud.com any time, which is usually in necessary, as they are typically available in Finder > iCloyd Drive or in that Archive folder, (Once you’ve signed out and kept a copy).
Once signed out, if you wanted to, could just move that data from iCloud Drive Archive, to whatever location you need to.
If Desktop and Documents were syncing with iCloud, you can easily open iCloud Drive Archive > Desktop or Documents, select the files and drag them back to the local Desktop or Documents folders, where they may have been before using iCloud Drive.
Hope any of that makes sense! Here’s an article that may explain better than myself:
Archive or make copies of the information you store in iCloud:
https://support.apple.com/en-us/HT204055
Even if you accidentally delete them from iCloud and empty the trash, you may be able to retrieve them afterwards:
Recover deleted files at iCloud.com:
https://support.apple.com/guide/icloud/recover-deleted-files-mmae56ea1ca5/icloud
Also, setting up Time Machine is a life saver!:
Back up your Mac with Time Machine:
https://support.apple.com/en-us/HT201250
So there’s lots of backup and recovery options, but in my experience, if signing out lags due to saying iCloud is still uploading data, telling it to stop and turn off is safe, and typically all that data will be in the iCloud Drive Archive folder as well as at iCloud.com, (And your other devices if you are using iCloud Drive with them).
Hope that helps!