How to clean up hard drive volumes (what can I delete?)

From your screenshots it appears someone (you or the previous owner) reinstalled macOS to the "Update" volume since there is a pair of "Update" and "Update - Data" volumes in addition to the proper "Update" volume used by Big Sur. There is also a lone "Macintosh HD" volume which is either a left over from a previous macOS install or it contains an older version of macOS.

You need to start over with a clean install of macOS. Make sure to erase the whole physical drive instead of a volume. Unfortunately Disk Utility now hides the physical drive from view so make sure to click "View" and select "Show All Devices" so that you can select and erase the physical SSD within Disk Utility while booted from the macOS installer.

You can attempt to rename & delete volumes. I suggest using Disk Utility to rename the "Update - Data" volume. I suggest changing the "Update" part of "Update - Data" to "Macintosh SSD" so the volume ends up as "Macintosh SSD - Update" which should change the first "Update" volume to "Macintosh SSD" since they are linked together, but renaming the "Update - Data" will confirm which other volume is linked. While the system volume and data volume are "linked" unfortunately changing the volume name within the Finder won't change the name of both volumes like it should. Changing the volume name using Disk Utility is the easiest way of keeping the system volume name and data volume name with the same base name (in this case "Macintosh SSD"). As a final step delete the "Macintosh HD" volume using Disk Utility. While doing this may work it is likely the system volume may contain extra unneeded files that were on the Big Sur "Update" volume when it was used as an actual update volume during a previous Big Sur install. I know this is confusing.

Here is an Apple article about the new read-only system volume "Macintosh HD" and the read+write "Macintosh HD - Data" volume containing the user account folders and the read+write data starting with macOS 10.15 Catalina. Big Sur also adds a new "Update" volume which is used for system updates and may appear as "com.apple.update" (on an M1 Mac).

https://support.apple.com/en-us/HT210650

Article about Big Sur "Update" volume (com.apple.update):

https://arstechnica.com/gadgets/2020/11/macos-11-0-big-sur-the-ars-technica-review/11/

If it’s under /Users, you’re free to clobber it all.

But if there’s already contents with a newly-acquired Mac, here is the sequence Apple intends, and which will purge the previous contents and settings:

What to do before you sell, give away, or trade in your Mac - Apple Support

Not having the previous Apple ID, you’ll be skipping a few steps from that sequence.

Do not try to use an existing macOS install, as it’ll all be tied to the previous owner. This includes app upgrades.

The directory /Users is the default location of all user logins; all home directories exist under /Users.

Within that path, you’re free to add or remove “stuff”, and only you (or the other users involved) will be effected.

Outside of that /Users path, macOS manages the contents.

macOS on APFS does its own thing with where it keeps parts of macOS.

What you’re looking at here are a mix of your stuff in Data, of backups, recovery, and the volumes of macOS itself.