As already mentioned, you have enabled Desktop & Documents in iCloud drive.
However, the instructions you were given to reverse the option are incorrect. Don't unhide anything. Don't try to create new Desktop and Documents folders. Don't freak out.
The Folders and Files in them were not moved into Mobile Documents.
The "move" was all Finder tricks to make you think they were moved.
To disable Desktop & Documents:
Disable the option in iCloud Drive options in iCloud System Prefs.
It will warn you that the files will not be available on your Mac, only in iCloud Drive--that's ok.
Open each of the Desktop and Documents folders that are shown in iCloud Drive.
Drag the contents of each folder to the now empty Desktop and Documents folders in your Home folder.
It will warn you that the files will no longer be available on iCloud Drive--again, that's ok.
How it works:
When you enable the feature, Finder stops displaying the Desktop and Documents folders in your home folder. It instead shows them in iCloud Drive. The folders and the files were not moved, no links were made. The files were uploaded to iCloud Drive.
When you disable Desktop & Documents, hard links to the files are created in the Mobile Documents folder that holds the iCloud Desktop and Documents folders. This process is extremely fast because it is only creating a reference to the location on disk*.
When you drag the files out of iCloud Drive, it creates hard links back in the Home folder and removes the reference in iCloud Drive folder. Again, an extremely fast process as no actual bytes were moved or downloaded.
*A hard link is indistinguishable from the actual file because it is a reference to the inode on the disk.
When you delete one of the Hard Links (or even the original file), the reference count is checked and if it is greater than 1, the reference is deleted from the file system table, but the data still exists and all other references remain valid.
