Confused about how exactly iCloud / Photos / WhatsApp work together in terms of storage & syncing/backup

If iCloud Photos Sync is ON, and WhatsApp 'Save to Camera Roll' is ON, all WhatsApp media you recieve is uploaded to iCloud Photos, right?

Now, there's an option in iCloud Photos to 'Optimize iPhone Storage' – "If your iPhone is low on space, full-resolution photos and video are automatically replaced with smaller, device-sized versions". Does this also apply to WhatsApp media?

If 'Optimize iPhone Storage' doesn't work with WhatsApp media, what happens if I delete some old WhatsApp media to free up space on my phone? Will the old photos/videos still be accessible on my Camera Roll / iCloud? Or will they be permanently deleted?