iCloud & iCloud Photos · Desktop & Documents in iCloud
Why does iCloud Drive have Desktop and Documents folders named after my other Mac?
Short answer: When a second Mac turns on Desktop & Documents, macOS puts that Mac's existing files into folders named after it (Desktop – Mac name) so nothing gets mixed up. Sort them into place and delete the empty folders.
When you turn on Desktop & Documents Folders on a second Mac that already has its own files, macOS keeps them apart instead of mixing them: the second Mac's existing files go into folders named like Desktop – Mac name and Documents – Mac name inside the shared Desktop and Documents.
Nothing is lost. Look through those folders and move files where you want them, then delete the empty folders. After that, both Macs share one Desktop and one Documents.