In my case, this "Synched Content" was the result of syncing photos from my PC, instead of from iCloud. In iOS 16.x it was all merged in the "photos" under "iPhone Storage" in "General". After the update, they are separated into "Synched Content" and "Photos". On a "test phone", iPhone XS, I tried to remove the synched content in iTunes, but the content stays there under "...storage" and is taking up space (59GB) nor can I re-synch the photos back again.
It doesn't matter the phone, it's an iOS 17 issue, as far as I can tell.