iCloud use as storage and not "reflective" like dropbox I hope this hasn't been asked exactly like this before. I tried to do a search. 

I am referring to my MacBook (but I think the same is at least partially true for other devices as well).

I checked "optimise storage" so that it will leave some space on my Mac. 

I need more storage on my Mac because some apps like Xcode cannot be updated with just 25GB left on the SSD. 

So - please let me know if this is true: ONLY desktop and "document" and their subdirectories are reflected back to my MacBook. Is this true. If so this implies that if I make another folder on iCloud like "Documents2" and push a lot of stuff that I don't daily need or want into that folder - this will NOT be copied over to my Mac, even if there is enough space? 

Is this correct?

Thanks,
Jeff
iCloud is not 'storage' it is 'data distribution'.

It isn't designed to 'keep things on', it's designed so that whichever device you pick up, you have access to the same files.

The closest it comes to being 'storage' is if you have a small, overloaded drive it will start to offload such as full-size images, leaving smaller versions locally.

Purely personal opinion:
Many people were sold laptops with far too little drive space on them &amp; are now paying the price for economising/marketing strategy.
256GB is absolute bare minimum, imnsho, &amp; 128GB is simply not enough for much more than the OS.