Why is my iCloud Files bigger than it should be?

Above is my iMac 24" (M1 2021, Sequoia)

What happened >>

• I open my iMac to work like I do every day, and it's usually fine. One day I noticed that my local storage is almost full, so I tried to organize some files using my iCloud. I see "Optimize storage of flies from iCloud" saying it can help me organize my local files and move them to iCloud. I clicked. And the double storage incident happened. 
• I don't know how it works, but I clearly see my flies remain the same in Desktop (Applications & Documents tab.) I expected it to move to iCloud and my local drive must be more space, but it's not. Isn't iCloud a server? why are these files still in my iMac?
• My iCloud plan is 200GB, but it shows 331GB. Before I clicked Optimize, there was around 25GB. But I can save my work normally, so I think this is the real storage I've left. What happened here and what should I do with this weird Storage Bar?
• I tried unchecking "Optimize storage of files from iCloud," restarting iMac, but it didn't help.

This is current situation >>

• Storage Number (lists below) going further than the way it should. (This is 512GB model)
• iCloud Drive still at the same number, despite deleting almost everything in iCloud.com
• System Data (Last one) never-ending calculating.
• In my Finder > iCloud Drive tab, It's show syncing something for 2 days and it's still stuck at around 25% not progressing further.