The Storage Management is known to show incorrect information. I'm on Ventura and I don't see a "Free" designation in the Storage section.
The best place to see the amount of "Free" space is by checking Disk Utility. You will clearly see that Disk Utility shows both a "Free" value and "Available" value which usually are different with the "Free" value being the smaller of the values and the more meaningful value. The "Available" value usually has a "purgeable" value in parenthesis which is what will become "available" at some point once macOS releases that storage area (no one knows exactly when that storage will be released and converted to the "Free" space).
You will see the "Free" + "Purgeable" = "Available".
Edit: I believe the information in the Storage Management area is calculated based on the Spotlight indexing, but I'm not entirely sure. I thought that is what some other more knowledgeable contributors mentioned previously.