Hi,
I had the same issue; please check for the following behaviours
1. When you open the iPhone Storage settings, the phone takes a long time populating the list and completing the category split
2. Some applications are missing from the list, and/or some are listing an unusually high storage usage value, expressed as a meaningless row of numbers like 10483947900478349204 which can't be a Gb value.
3. Some features in that app are not working; in my case: Whatsapp backup was not being completed as it asked for more space.
In my case, it was Whatsapp; sometimes it appeared with wrong storage values, sometimes it did not appear; it seems to me this started with failed backups due to network errors or interrupted backups; it then quickly escalates to being unable to backup Whatsapp, as more storage is needed to perform the backups
Resolution:
1. Try to find the space needed to complete that backup, this will allow you to void loosing any whatsapp data; choose to delete (including data) an app that's on top of the list which contains no "true" user-created data that cannot be restored from the Cloud, or choose to offload a few apps which are large (note that for some apps, user data is small, and the app is large. Good candidates for this: Spotify (just reinstall and re download local cache later), Email (if you are synching with the server). Consider selectively deleting media from group chat to make the backup smaller and make it fit.
2. Delete the app that has unreasonable storage or is not in the list; in my case, I removed Whatsapp. After you remove it, keep looking at the value for System Storage: I was over 28 Gb, it kept slowly but steadily getting smaller, to something around 14 Gb.
3. When you're absolutely sure it stops shrinking, restart the phone; reinstall Whatsapp. The backup will quickly reinstate all the messages, then will slowly restore all the media you had backed up.
4. Go to Storage Settings again: you'll notice the System Storage is still much smaller than before, and you should have plenty of space for future backups.
5. In Whatsapp, keep an eye on failed backup, as they may suggest something went wrong again.
Cheers.