Apple - Cannot delete Desktop and Documents folder from iCloud Drive after accidentally enabling their storage on iCloud
From my MacBook's Finder window, I deleted the empty Desktop folder from iCloud Drive and then immediately emptied the trash before the folder had time to reappear in iCloud Drive. The folder did not reappear.
After a few seconds iCloud refreshed and the Documents folder was deleted from my iOS device as well!
I then followed the same steps to delete the empty Documents folder.
Cheers!
Using trash works for me as well.
There is a delete immediately (in case you don't want to empty trash, also easier than racing to beat the iCloud Drive restore of Desktop and Documents) option - click OPT+CMD+Delete
There are prompts to answer to confirm the in place deletion you must answer for the delete to happen.