What it means
Free up space on this device removes local copies of items Google Photos considers safely backed up. The items remain in the Google Photos library online, but may disappear from the phone's built-in gallery or be unavailable offline. Deleting an item from the Photos library is a different action with broader consequences.
A real-world example
A parent taps Free up space, then the built-in Gallery looks empty. The photos may still open at photos.google.com under the correct account. Deleting them there would remove the cloud copy too.
What to do
Verify several important items online before cleanup and keep a separate archive. After cleanup, use Google Photos to view or download an item you need offline.
The distinction that matters
A 'backed up' status is not a substitute for checking the correct account and content. Google's help describes device removal and how it differs from viewing the library.
Google's Free up space instructions