Based on my understanding, the . means current folder where the shell script is executed. And you can replace it with some other path.
Second, find will go through all subdirectories recursively by default.
And if you want don’t want find to go into the subdirectory, you can use -maxdepth to limit the maximum depth that find will go.
find . -maxdepth 1 -name '*.md' | xargs -r sed -i '' "s/$ORIG/$REPL/g"