How do I turn off Optimize Storage?

On a Mac -- Apple menu > System Settings > [user name] > iCloud > Drive > Optimize Mac Storage.

To return your Documents and Desktop folders back to your computer instead of iCloud, then go to Settings > [name on top] > iCloud > Drive, and turn off the setting for Desktop and Documents folder.

SPMich wrote:

I am having the same problem as the questioner, and when I follow this advice, there are no "Desktop" or "Documents" options in my iCloud settings.

Follow the excellent pictures provided by FoxFifth for the Desktop & Documents Folder also.

If this is turned on, then your Desktop and Documents Folder are located on your iCloud Drive. You can also review the Documentation provided here:

When you turn off Desktop & Documents Folders, your files stay in iCloud Drive and a new Desktop and Documents folder is created on your Mac in the home folder. You can move files from iCloud Drive to your Mac as you need them, or select all of your files and drag them to the place you want to keep them.

Add your Desktop and Documents files to iCloud Drive - Apple Support

Ron Fernandez wrote:

I was recently was in a situation where I did not have connectivity (and didn't want to bother with logging in, paying for X hours, etc.) but couldn't get to my work.

This was a critical issue.

Yes. If I go to an important meeting or to rural area, I copy such mission critical files to local storage from iCloud Drive, just in case.

Just to verify where you are looking, see below.

If not found there, what macOS version do you have (from Apple menu > About This Mac)?

After clicking on Apple menu > [username] > iCloud, see the next two clicks at red arrows in the following screenshots:

I am having the same problem as the questioner, and when I follow this advice, there are no "Desktop" or "Documents" options in my iCloud settings.

Like the original poster, I find that there is no "Optimize Storage" option in my iCloud menu. I am going a bit nuts at this point.