turn off icloud sync AND recover desktop and docs on the macbook
Not sure if everyone got an answer, but this site shows an easy way to do it. Worked great for me...https://appletoolbox.com/how-to-stop-icloud-syncing-desktop-folders/
Basically, you turn off syncing to icloud. It does not delete from icloud, just your desktop.
Then open a finder window and select icloud. You will see desktop and documents folders.
Open a second finder window and click the local documents. Drag the documents folder from its location in the icloud in one finder window, to the local documents location in the second finder window.
Repeat for the desktop folder. Then you can organize the desktop again however you like, and it will not be taking up storage space in the cloud.
iMac 21.5″, OS X 10.11