Answering my own question; Contacts app is either broken or deliberately misleading to get you locked into icloud. I went through the effort to add a cardDav sync, why not let me use it? There is a work around that can be done on the iphone to move contacts erroneously created in icloud to the carddav server.
Select only iCloud contacts group in Contacts app, then Export each contact to files app. Take care to name the file uniquely.
Turn off iCloud sync in Settings > Apple ID [etc] > iCloud, and make sure Contacts is OFF!
Now in contacts, groups you should see your added cardDav group listed first, in my case Fruux.
Then verify new/imported contacts get added to Fruux group in Contacts app. You can then pull the previously exported contacts out of files app and share to contacts, they will now be saved to Fruux.
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Why not add the ability to select what sync server when adding a contact?