Why did my desktop and documents suddenly get renamed "Desktop - Local" and "Documents - Local"? Here's my iCloud settings:



As you can see, the Desktop and Documents Folders checkbox is unchecked. 

Despite this, my Desktop and Documents folders have suddenly been renamed to "Desktop - Local" and "Documents - Local" respectively.

The only reason I can think of is this may be due to installing iOS 11 on my iPhone, but I'm not sure.

Can anyone suggest any other possible reasons?
This is caused by iCloud Drive. This is to distinguish it with the Desktop and Documents folders on your iCloud Drive, which are named "Documents — iCloud", even if you didn't setup iCloud Drive on your Mac. 

The most probable cause, as found by the OP and me, is installing and running the new Files app on iOS 11.