This document explains, what iCloud Photos is doing: Set up and use iCloud Photos - Apple Support
Unfortunately, you seem to have been using iCloud Photos unintentionally without being aware of it, and it is hard to revert back, if you are now having more photos in iCloud than will fit onto your device. The upgrade to iOS 12 may have enabled it as a default. With iCloud Photos enabled Photos will store all photos in iCloud. If you are running out of storage, it will remove temporarily photos you have not used in a long time to free storage. If you want to see the photos, they will be downloaded from iCloud. You may not notice, if you are taking more photos than your iPhone can store.
The warning you are getting is telling you, that you have collected more photos in iCloud than will fit onto your iPhone. So you cannot disable iCloud Photos without losing photos or videos.
I would do the following:
- Enable iCloud Photos again, so you can access the photos win iCloud on your iPhone.
- View a few photos enlarged (photos you took with your iPhone, no what' app download).
- Connect the iPhone again to the computer, make sure it is unlocked.
Do the photos you just viewed on the iPhone show on your computer?
If yes, import the photos to the computer, then delete them from the iPhone to free storage. Repeat importing and deleting, until you have freed enough storage to be able to disable iCloud Photos.
What kind of computer is it? Which system version?
