iCloud downloads all files on MacBook. How to choose what to download?

Question

Apple iCloud

I have a 128gb MacBook Air 2017 and a 200gb iCloud plan. We will conditionally assume that the cloud is clogged with files from other apple devices. I synced my macbook with icloud, and the latter uploaded a lot of files, filling up the entire storage of the laptop (2.87 GB is available now). Is there any way to configure it to have more free space? Or directly choose which files I need locally and which don't?
P.S. Storage Optimization is enabled but doesn't seem to help much