Same issue. I have more than enough free space but Steam is telling me I don't. Even deleted a couple of games and restarted the download, still says not enough free space.
I think you need the same amount of space that the game is currently taking, which is roughly 85-86 gb. But I can't really afford that much space, so can we get a fix over this? I don't mind if the game slowly moves towards 150 gb but right now it wants 170gb+ out of nowhere and I am sure patches will get bigger in time so I will need 300 gb after a while? Please fix this issue. I can't play the game at all.