To my knowledge, this same issue has happened to many people since an update on October 5th, 2022. It seems to only occur on my main world, which takes up more space than the other worlds. Despite what it says, I do have plenty of storage. I wish this issue would be fixed seeing how it has been many months and it is effecting many people very negatively. I cannot explore my world at all or do much really, which is annoying since I wanted to explore for 1.20.
Along with this issue, I am also experiencing an issue where when I save a world it says “world upload failed would you like to try again?”. When this happens there are two options, retry and cancel. Retrying does nothing. When you press cancel it usually will still save the world though. This issue started the same time the other one did. Because of this, I’m pretty sure these go hand in hand. Please fix this Mojang. I cannot play because of these issues.