Why Is the system data on my MacBook so high?

Why the urgency to reduce the /System/Volume/Data ?

Right now, as per you image

There is still about 40% of the Entire Drive Capacity as is still usable for storage - no ?

If you still insist on exploring /System/Volume/Data in an attempt to reduce its size

Read on

System Data technically, has a mount point /System/Volume/Data 

With a mount point of /System , this Volume is part of the Operating System and can not be deleted - full stop

It is where your User Account (s)  was made when the computer was First Setup as New

We can point-out what may be included in this Volume

Though, how to reduce this is a long and complicated trial and error process

The category is a collection of files which include:

• System temporary files

• macOS system folders

• Archives and disk images (.zip, .iso, etc. - often found in the Downloads folder)

• Personal user data

• Files from the user’s library (Application Support, iCloud files, screensavers, etc.)

• Cache files

• Fonts, plugins, extensions

• Other files that are not recognized by a Spotlight search

• Media files that cannot be classified by Spotlight as a media file because they are located inside of a package

•Time Machine Backup Snapshots that have not been transferred to the TM Backup Drive 

• Locate backups of your iPhone, iPad, and iPod touch.

•Was there or is there another user account currently or previous used on this computer ?

Has the account been removed ?

Did the removed user account ’s Home Folder also been removed ?

Delete a user or group on Mac

• If using a Cloud Based Services to sync files,  like iCloud and One Drive. These can also occupy space on the Internal Drive 

They can be located anywhere on your hard drive. The files that you have control over are located in the Documents, Downloads, Pictures, Music and Movies folders.  You can use either of these two free apps,

GrandPerspective , to find the largest files on your drive so you can determine if they can be deleted or moved to an external HD for storage.  

Another Application to find and analyze what is using space on the drive is Etrecheck >> Clean up

Have you installed any unneeded aftermarket utilitites like anti-virus or so-called "ceaning" apps?

If your Time Machine drive connected and working?

+1 on EtreCheck. It gives us a data-driven evaluation in this setting where we can neither see nor touch your computer. We can quickly and within the limitations of these forums help you determine what issues are at play without our playing a protracted game of "20 Questions" with you that could go on for days. 

EtreCheck Pro is available here:

https://etrecheck.com/index

The free version will do nicely for this purpose, although the app is worthy of our financial support.

We can see hard data about drive performance, software issues and interferences, and RAM usage. Etrecheck is the development of a long-serving and trusted ASC contributor. It is a reporting app, not a "fix-it” app, expressly for displaying information in these forums to help us help you remotely. It will not reveal any personal or secure information.

Please see this excellent user tip on how to post long text reports like EtreCheck's into a forum response:

How to use the Add Text Feature When Post… - Apple Community

This can happen, have you tried to turn off your Mac completely, and turn it on again to clear the cache data. If the system data remains that big you might need to reinstall macOS

For one reason or another, I sense the real issue is the 256 GB Capacity of the internal drive

To draw a parallel

At some time, years ago, Apple sold MBAs' with the tiny 128 GB SSD configurations which IMHO should have never been but it was.

Users chose this option thinking 128 GB was plenty of space to do everything

Just to find out, 128 GB was too small as their needs grew and newer versions of macOS also grew

Time Warp to 2025 and a 256 GB SSD drive capacity

Should all this be accurate ?

At this stage, you have what you paid for, 256 GB Capacity

The most you can do, is to manage the available space this drive affords you.

Next time

Plan what your current needs are and factor in what you anticipate what your Needs will be for the next 3 - 5 years ( as best you can )

Purchase a computer with a larger internal drive and more RAM

This may future-proof the computer.

It may help to reduce the need to try and reduct the System/Volume/ Data

Just saying

The system data seems about right. It is lower than most users report.

👍