Phots does not tell you, when it has finished downloading the originals. It will only show a progress message, while it is still uploading to iCloud.
Photos will need several days to download 200 GB from iCloud. The size of the local library will probably be at least 40 to 50GB larger than the library in iCloud. Do you have more than one Photos Library? And are you checking the size of the correct library in the Finder? 7GB is very small, even for an optimized Photos Library, if the original library in iCloud has a size of 200GB.
After you changed the photos > Preferences to "Download Originals to this Mac", view your photos enlarged to force the download from iCloud. Do you have enough free storage? Photos will not download the photos from iCloud, if you are running low on storage.