I had wondered if that might be the issue. I enabled Desktop and Documents on a fairly clean install, so didn't have much to transfer. I imagine that folder was created as a temporary location until all documents were transferred. In my case, it wouldn't have existed long.
If it is still transferring, there should be a little pie in the sidebar next to Documents indicating it is transferring files.
Do you see any indication of files still being transferred to iCloud?
Can you confirm that all of your documents have been transferred?
Is it possibly stuck because you ran out of iCloud storage?
I'm just trying to understand what is supposed to happen during this process.