Mac Desktop Items and Documents Disappear After Signing Out of iCloud or Turning Off Desktop and Documents Syncing Within iCloud Preferences
Here's Apple's info on how to enable it and setup your items in your iCloud Drive:
Add your Desktop and Documents files to iCloud Drive
Here's what happens when you turn OFF Desktop and Documents or Sign Out of iCloud, and how to get your files moved back:
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.
If you turn off iCloud Drive or sign out of iCloud, you have the option to keep a local copy of your files that are in iCloud Drive. Whether you decide to keep a local copy or not, a new Desktop and Documents folder is created in your home folder.
If you choose to keep a local copy, your files in iCloud Drive are copied to a folder called iCloud Drive (Archive) in your home folder. Then you have the option to move any files that were in your iCloud Desktop and Documents, back to your new local Desktop and Documents.