I found a partial solution. After reading some forums I downloaded a desktop program called iMazing (http://imazing.com). In that program I clicked on the "Photos" menu and a progress bar appeared saying "Loading Photos" --- this continued for about 60-90sec but then completed and said that the folder was empty. When I click the "Get Info" button for the Photos folder it says size of the folder is 0B. Same for the Camera folder (0B).
However, in the File System folder I found --- that's right! --- 1323 photographs. Cannot be a coincidence that is exactly the number of photographs that iTunes says I have on my phone. I found these photos under "File System -> Media -> DCIM". I copied the photos onto my desktop (just in case) and then deleted the photos from within the iMazing program.
I also found thumbnails of these same photos stored in "Media -> Photo Data -> Thumbnails -> V2". The thumbnails alone were taking up almost 1GB, so I deleted those too.
Interestingly, only photos from 01-Oct-2014 were "stuck" in this Media folder, so this seems to have been a problem that started a few months ago. If I hadn't fixed it I guess my phone would've eventually just been filled to the brim with these undeleted photos?
Deleting these photos definitely freed up space on my phone.
However I did say this was a partial solution. In iTunes it still says I have 1323 photos on my phone. These phantom photos are driving me crazy. 😟
There are actually four files saved under "Media -> PhotoData -> Thumbnails" called 3303.ithmb, 3309.ithmb, 3319.ithmb and 4031.ithmb. I know these are thumbnail files, but each file is HUGE (up to 297MB) so the four of them add up to a big chunk of space. I'd like to delete these 4x files but don't feel confident enough to do that. I don't mind deleting .png and .jpg files, but files with unknown extensions... I'm a little more cautious.