This is another case where Apple support wasn’t much help in getting rid of the confusion. (Though I did have a good Apple support call about bluetooth connectivity that solved the problem).
Here’s the issue.
I have a 2 TB iCloud subscription. I am syncing everything I can turn on from my MBP, including Desktop and Documents. And Photos too, I do not have disk optimization turned on. My MBP is 2 TB SSD and I also backup with Time Machine and CCC.
My Photos library alone is 474 GB in size, and appears to all be in iCloud.
In the Finder when not in an iCloud directory it says I have 873 GB available, That means there must be about 1.1 TB worth of stuff on my MBP.
The confusion: In a directory that synced to iCloud (e.g. Desktop) it says 1.56 TB available on iCloud. How can that be? It seems there should be less that 1 TB remaining on iCloud with everything possible synced, backups, and things synced from my iPhone and iPad too,