Storage showing there is 366GB of free hard drive space but documents takes over 440GB+

Storage showing there is 366GB of free hard drive space but documents takes over 440GB+

I'm having issues with Time Machine stating that there is not enough free hard drive space

I believe that the documents is actually Dropbox smart sync - online only files that are being synced

those files are not on the hard drive

I'm having issues with Time Machine believing that there is not enough free hard drive space