iCloud+ Drive: Why is it downloading all files to my laptop? (Optimise Mac Storage = ON)

Hi, I pay for iCloud+ so I can free up space in my Macbook, I want all my files in the cloud... But I signed in to my account (in macOS Settings) and all my iCloud files started -and finished- downloading to my laptop. How do I make them stay online and stop them from automatically downloading to my laptop? Can I just delete them from my laptop or will they disappear from my iCloud account? If this is the case, what's the point of using iCloud Drive? I may be misunderstanding how it works. Note that I have alreday "Optimise Mac Storage" set as ON (macOS Sonoma). TIA edit: typo