Exclude folder from sync from iCloud to device (laptop)

I have many devices connected to an iCloud account, and for some devices (specifically laptops with small disks) I would like to exclude folders from sync'ing DOWN to the laptop from iCloud. I know there are solutions from excluding folders from sync'ing UP to iCloud, but I want the opposite. Is this possible (in any MacOS version)?

Additionally, at Apples support site "How to free up storage space on your Mac" it says: "Files stored only in iCloud show a download icon", but this is not true, I have folders with that icon that are stored locally on my drive, taking up huge amount of space on my Laptop with a limited size disk.

I have the 2TB storage plan on iCloud but the typical SSD laptop disk is way smaller than this, so it seems obvious to me that I don't want the full iCloud drive sync'ed to my Laptop.

Sidenote: I'm starting to believe that my sync functionality have mucked up some way, since folders and files marked with the "cloud" icon is still stored on my laptop and in my Library -> Mobile Documents folder there is an iCloud Drive folder which IN-TURN contains an iCloud Drive folder.

iCloud Drive is a syncing solution so you can't exclude folders from getting synced from the cloud onto your computer. You can have macOS manage the space on your Mac though by going to System Preferences->iCloud, clicking on "Options" at the end of the iCloud Drive line and selecting "Optimize Mac storage". This will just sync the whole folder structure without downloading the content unless you need it. Non-downloaded files/folders will show a Cloud icon in Finder.