iPadOS taking up whole space after update to 16.5.

Begin with a forced restart of your iPad - and then reassess before considering next steps.

Force restart iPad (models with Face ID or with Touch ID in the top button)

If your iPad doesn’t have the Home button, do the following:

1. Press and quickly release the volume button nearest to the top button.
2. Press and quickly release the volume button farthest from the top button.
3. Press and hold the top button.
4. When the Apple logo appears, release the top button.

Force restart iPad (models with the Home button)

Press and hold the top button and the Home button at the same time. When the Apple logo appears, release both buttons.

If the problem persists after performing the restart, it will be necessary to reset your iPad settings. While this reset will not cause any loss of data, as a precaution, it is always wise to ensure that you have a current iCloud or iTunes backup before performing the reset:

How to back up your iPhone, iPad, and iPod touch - Apple Support

When you are happy to proceed, you can perform the reset from iPad settings:

Settings > General > Transfer or Reset iPad > Reset > Reset All Settings

If the problem still doesn’t clear, it may may be necessary to perform a factory restore - as this will both fully reset the iPad and install a fresh copy of iPadOS:

Restore your iPhone, iPad, or iPod to factory settings - Apple Support

With available information, it isn’t possibly to provide an explanation as to “why” this may have occurred - other than to speculate that you have encountered an unexpected glitch or bug.