nerval wrote: what should be in icloud drive top level and what should be in documents folder?
It's pretty much whatever you want. iCloud Drive is just a folder on your Mac. The difference between it and any other folder is that its contents get copied to iCloud Drive at iCloud.com.
Lots of people like to keep their work in the Documents folder, but I don't use Documents for much. It's a folder that every app can count on being on the Mac, so it's designed for apps to be able to count on using for their own needs. Documents may be the default folder for Pages or Word, for instance. You usually don't have to go with that choice-- it's up to the apps.
The Desktop is also just a special folder whose contents show up on the Desktop screen. Some apps automatically save stuff there, since every Mac has one. That's why it gets so full.
You should see this:
Understanding iCloud Drive - Apple Community
What do you think?