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I think you're misunderstanding - it doesn't let you upload, as you have exceeded your cloud storage (15GB). The photos should still be on your local storage on the phone (which is the 256GB you mentioned). In the past, you usually got a free subscription for the cloud storage when using a pixel phone (at least for 1-2 years when registering a Pixel IIRC), but Google got rid of that a few Pixel generations ago.