Q: desktop and documents on icloud

Enabling iCloud Drive doesn't wipe anything.

That simply syncs the content of those folders to/from iCloud.

If you "also" use any of the new file storage optimization features, that "may" make cloud copies instead of local copies of older files.

These settings are made by separate choices, not because you turned on the iCloud Drive.

Please read >>> Save storage space on your Mac - Apple Support

Your files weren't necessarily going anywhere. They were being synced in a new way now available in Sierra.

The file structure and location has changed between iCloud Drive under El Capitan and under Sierra.

Apple has not published the exact triggers that dictate whether your files are local  or online.

See here for what is known at this time >>> macOS Sierra: View file, folder, and disk information

To provide access to the "same" Desktop and Documents folders across your macOS Sierra devices, changes were made.

You will still have local access to all files stored in these 2 folders once the syncing process is complete.

There are differences if the "other" Mac is not running Sierra.

I think what is happening is we will all "see" different things that Sierra iCloud Drive may do on our systems. mI have 600+GB free, so all my files are both local and on/in iCloud.

It seems if you have lots of system/local drive storage, your files are indeed synced between your Mac and iCloud, as before. When your local drive space is at a premium, some files may be "moved" to the cloud and you will need internet access to get them. Don't think we can control that algorithm.

See here in the new optimization dialogs... key phrase... "when storage space is needed"

Hi guys,

I have pretty the same problem. After upgrading to Sierra, all of my documents in iCloud are missing. I had a lot of Pages, Nimbers and Keynotes documents. Now there is nothing. I've  tried to reach them on my iPhone and iPad several times, but everything is empty. I simply don't know what to do now...

Seems we are stuck ... Apple has implemented some sort of Heisenberg uncertainty principle in their file manipulation and storage. The files are not observable with respect to their exact position. I tried canceling the Desktop and Documents storage to the iCloud and I can no longer find my files. The Finder has that spinning radial indicator in the lower left of the window and although there is a folder there is nothing being displayed. Worst part of it is I have a talk to give and need to find a copy of the file on one of my devices/macs or I will be in trouble. Hopefully the syncing through the iCloud will remove the 'uncertainty'.

But if the files are in another the universe ... does the same physics hold? Then again maybe time runs in reverse there and the files will miraculously reappear in their original state ... yep, maybe the Apple programmers who will be occupying that 'space ship' are really from that other universe.

Ok, I was able to de-select the Desktop & Documents Folders option but it did not return to the original local Desktop and Documents states on the Macs. I guess it is really 'undoable'. My faux pas was to assume that Apple had some type of rapid file transfer scheme to avoid the 'time dilation' issue with transfer issues. So now it is saying it is Uploading 319 Mb of 44.4 GB while trying to Download 1.1 Mb of 65.9 MB. I am in 'stasis'. The issue is, as people have said, all about the bandwidth of the transfer. I actually, DUMBLY, never checked the size of my Documents folder. I wish there were a warning (maybe there was) on the size constraints. SO, the bottom line is, I have made my files 'invisible' while they likely transfer in the 'ether'.

Well, I decided to plunge back into the abyss ... to risk my Schrodinger cat's life (my data). I turned on the Desktop & Documents option again but only for one of my three computers (I figured the 3 body problem was unsolvable!). At that point all transfers were stopped ... of course that was expected. But what was sorta unexpected is that I 'gained' negative data! I may have killed the cat and reversed data! These Apple engineers are so creative. I wish I could prove I am seeing negative data  but my screen shot will not transmit instantly across the universe using an entangled state. Apparently, Apple has not yet perfected instantaneous data transfer.