MacOS Sierra how to properly disable iCloud Drive?
Always make a copy of your Documents &amp; Desktop prior even thinking about disabling iCloud.

If you hit Keep a Copy button, what that button actually means is. 

"I'll go ahead make new folders called Documents &amp; Desktop, they'll be empty when you open them" 

It'll retain majority of your files in ~/Library/Mobile Documents/iCloud Drive folder.

By Some files, I mean some of the files will contain references to the files on iCloud drive. You'll see them appear normally in Finder but you won't be able to view them. 

For example
wall1.jpg in finder, if examined closely in Terminal is actually called .wall1.jpg.icloud  &lt;-- any attempts to rename it from that file, will yield an empty jpg without any data in it.

One thing is certain, iCloud Drive / Backup relationship to your files is backwards.

Your laptop should be Master where iCloud acts like a 'backup'. In reality iCloud is master and your laptop might or might not have full content of those files.

As far as 'Updating' I'd imagine it'd probably be good idea to let that run, to minimize the odds of not having all of the local files 'fully present'