Files disappeared from documents folder this morning. Can anyone help?

I'm on a Mac Pro (Mid 2010)

Processor: 2.8 GHz Quad-Core Intel Xeon

Memory: 12 GB 1066 MHz DDR3

A few weeks ago I upgraded to macOS Sierra version 10.12.2. Without thinking, I checked the box for iCloud to optimize everything. Then I read that it would delete old little used files and it would delete everything from my Documents folder that is in iCloud to save space on my hard drive. That freaked me out so I stopped the process.

Everything seemed ok until this morning. There was another update waiting (for a week or so) for my ok to go ahead but I didn't have time for that. Too much work to do. When I got to the computer this morning it had rebooted and installed the update on its own. I put in my name and password to finish the boot up. I went to my documents folder in the dock and all of the files were GONE. Except for the folder "Microsoft User Data". I was stunned. My "Work" folder was in there. It contained literally everything I'm currently working on. Everything!!

I checked the iCloud folder. Not there.

Anyone have any idea what happened? Is there any chance of finding the files that were in there?

I do have a pretty recent backup of that material. But now I'm afraid to use the Documents folder for fear of losing everything again.

Appreciate any insights/help you all might have.