I'm not sure what the storage issue is about. You may need to contact Apple Support: Contact - Official Apple Support
Referenced photos are not included in iCloud Photos.
For the definition of referenced photos, see the following from Change where your files are stored in Photos on Mac - Apple Support
When you import photos and videos into Photos, they’re copied to the Photos library in the Pictures folder. To save storage space, you can store photos and videos outside the Photos library (for example, on an external drive) and still view them in Photos. Files stored outside your library are called referenced files.
Also see the following from that same support article:
You can copy referenced files into your photo library so they’re easier to back up and are automatically stored in iCloud if iCloud Photos is turned on.