iCloud & iCloud Photos · iCloud Photos and the Photos library
How do I reduce the space iCloud Photos uses on my Mac?
Short answer: In Photos → Settings → iCloud, choose Optimize Mac Storage. Photos keeps full-resolution originals in iCloud and smaller versions on your Mac, freeing space gradually as it's needed.
Turn on Optimize Mac Storage in Photos. Open Photos → Settings → iCloud and choose Optimize Mac Storage instead of Download Originals to this Mac. Photos then keeps full-resolution originals in iCloud and smaller versions on your Mac, downloading an original when you need it.
How much space comes back depends on your library and your free space — macOS frees it gradually as space is needed.
Storage Studio doesn't touch your Photos library directly: it's managed by Photos and iCloud, and changing it from outside can confuse both. Storage Studio's job here is everything around it — showing what else is using space and moving other big folders to your fast drive. See moving the Photos library.