You lifted the carpet and what did you find underneath?

There’s not tile beneath the carpeting?

You get unfinished wood and have just the new fllor made to match the rest of the wood then if you want you can keep the tile and just rpelace the carpet which I am having trouble understanding why it was ever there.

No lucky finds under the carpet, just sub floor.

you can still do a wood, or a lux vinyl just in a contrasting color and style.

Like a diagonal, herringbone pattern. Is the Terracotta tile part of something else?

Maybe consider looking for a durable carpet remnant that would look nice there. Then keep saving up so you can transition all your floors on this level to be the same.