Hi there, it sounds like you have turned iCloud Drive Desktop & Documents activated on your computer, resulting in your failure to move folders. You can turn it off and then the new Desktop and Documents folders will be created on your Mac in the Home folder, which may allow you to drag folders to the Mac desktop without barrier:
Step 1: From your Mac, choose Apple menu > System Settings. In macOS Monterey or earlier, choose Apple menu > System Preferences.
Step 2: Click Apple ID, then click iCloud.
Step 3: Under Apps Using iCloud, click iCloud Drive.
Step 4: Turn off Desktop & Documents Folders.
Step 5: Click Done.
