No you don't understand it.
AN iPhoto installation is two parts: the app (in your application folder) is the software and the Library (usually in your Pictures Folder) is where your actual images are.
Photos is exactly the same: two parts, application and Library.
You can delete the app and not the Library, delete the Library and not the app and so on.
Now the complicated part:
You have your photos on the HD. It looks like you have two sets: one in the iPhoto Library, one in the Photos Library.
You don't have two sets. You have two libraries but they point to the same files.
So, if you delete the iPhoto Library you will get no space back because they are also used in Photos.
If you want to delete the iPhoto Library, just drag the whole thing the trash.