That section of Storage Management is misleading and often inaccurate.
The Storage Management section will consider any executable item stored anywhere on the Mac to be an "Application". It does not have to be located within the Applications folder.
Same applies for "Documents". It is not adding up all the items in the "Documents" folder, but also items on the Desktop & other locations which are considered to be some sort of text file (or document type file).
Unfortunately Apple doesn't convey things very well.
If you want to locate the location of the largest files & folders, then use a third party app such as OmniDiskSweeper. However, there are locations on the drive which cannot be accessed by any app, but may still contain large amounts of data. One such area are where the APFS backup snapshots are stored which the macOS Time Machine app uses as well as some third party backup apps. Normally these hidden APFS snapshots are automatically deleted after about 24-48 hours after the Time Machine backups have been transferred to external media. They can retain items you have deleted, so you may not seen any increase in storage until they are automatically deleted.
View APFS snapshots in Disk Utility on Mac - Apple Support
Also, on macOS, especially with the APFS file system, the only reliable & accurate storage value is the Free storage value which is only shown in Disk Utility & the System Profiler. Unfortunately the "Available" storage value shown every where within macOS is very misleading and is not synonymous with Free. Even the "Used" storage value can be misleading under certain circumstances due to how the APFS file system works.