Desktop Folder Not Appearing in Hard Drive & User Folders - iCloud Drive Turned On

I recently discovered that my Desktop folder does not appear under either my hard drive folder, nor my user folder when in the Finder. However, "Desktop" does appear in the left side bar under Favorites and iCloud sections.

I recently turned on Documents and Desktop Folders in my iCloud drive. Should I take this to mean my macbook pro is no longer storing my desktop files on my hard drive?

If so, will I be able to work with my desktop files while offline (not connected to a network, thus not connected of iCloud)?

Thanks,

Mike