That's the space allowed by the platform for Skyrim mods. Beth wanted more but that's what it is.
PS4 has a way smaller cap (1GB iirc) but then you can't get all the extra content on that platform 'cos Sony doesn't allow external assets

The cap is less of an issue on PS4 as pretty much all you can load up is small esp stuff.
On Xbone I have Beyond Skyrim Bruma installed and that takes up a fair bit of the allowed 5GB, and then I have another 3 extra content mods that are outside the map (I've disabled borders).
There is at least one other extra content mod that I'd like as well...I've tested it briefly but had to delete it for space. Maybe another one or two extra content mods I want and then there's a bunch of enhancement mods. I think I'd really need 10GB at least.
I still have just over 2TB free space total on my system. That isn't the issue here.