Mac storage basics · System Data and the storage categories
What counts as Documents in macOS Storage settings?
Short answer: It covers most loose files in your home folder — Downloads, Desktop, disk images, archives and videos outside Photos — not only the Documents folder.
In Storage settings, Documents isn't just your Documents folder. It covers files in your home folder that aren't sorted into another category — Downloads, Desktop, disk images, archives, large videos outside the Photos library, and similar.
Clicking the info button next to it lets you review large files and downloads and delete them from there. Before deleting, check whether a large file is something you'd rather keep on an external drive.
Storage Studio's What's Using Space lists your largest folders wherever they are, and can move big ones to an external drive instead of deleting. See finding big files.