Yes, that is true that Windows upgrade uses the space to make all the changes, but it should release it fairly soon. You can go in and do some house cleaning:
Free Up Space on the Current Drive
Open File Explorer, right-click the 😄 drive, and select Properties.
Click Disk Cleanup and select files to delete, such as temporary files and old system updates. Click OK to proceed.
Open Command Prompt as an administrator and run powercfg.exe -h off to disable hibernation and free up space.
Move large files or folders (e.g., Documents, Downloads, Pictures) to another drive: Right-click the folder, select Properties, go to the Location tab, and click Move.
Uninstall unnecessary apps via Settings > Apps > Installed apps.
Also check out this as this covers what most other articles also state about cleaning up and freeing up space after a Win11 upgrade.
How to reclaim space after upgrading Windows 11 to newer version