How to fix it? and why is it so large anyways?

https://preview.redd.it/274merqs3ofe1.png?width=980&format=png&auto=webp&s=a1b1dd8f3ef4787517e187ef3119479af7c1ff67 I have Macbook Air M3 512, and I am still wondering what would have happened if I bought the 256 one.