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There's a difference between iCloud storage and on-device storage. One can be full while the other is not. Since you get just 5 GB of free iCloud storage while you can have far more on-device storage, it's not that hard to exceed iCloud storage while having plenty of storage remaining on your device.

To see what's in iCloud, go to Settings > [your name] > iCloud > Manage Storage.

To see what's stored on your device, go to Settings > General > iPhone (iPad/iPod Touch) Storage.

See https://support.apple.com/HT206504
 
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