Starting with the next major Windows update, Microsoft is going to reserve about 7 GB of disk space on Windows’ root drive for something it calls “reserved storage”, basically a space for updates, apps, temporary files, and system caches. Note that the 7 GB is variable, and will change depending on how you use your system.
When apps and system processes create temporary files, these files will automatically be placed into reserved storage. These temporary files won’t consume free user space when they are created and will be less likely to do so as temporary files increase in number, provided that the reserve isn’t full. Since disk space has been set aside for this purpose, your device will function more reliably. Storage sense will automatically remove unneeded temporary files, but if for some reason your reserve area fills up Windows will continue to operate as expected while temporarily consuming some disk space outside of the reserve if it is temporarily full.
In the comments under the blog post announcing this change, Microsoft’s Craig Barkhouse explains in more detail how, exactly, this feature is implemented. Instead of opting for VHXD or separate partitions – which would cause a performance hit and compatibility issues due to the files residing in a different file system namespace – the company optied for making use of NTFS. As Barkhouse explains:
Instead we designed an elegant solution that would require new support being added to NTFS. The idea is NTFS provides a mechanism for the servicing stack to specify how much space it needs reserved, say 7GB. Then NTFS reserves that 7GB for servicing usage only. What is the effect of that? Well the visible free space on C: drops by 7GB, which reduces how much space normal applications can use. Servicing can use those 7GB however. And as servicing eats into those 7GB, the visible free space on C: is not affected (unless servicing uses beyond the 7GB that was reserved). The way NTFS knows to use the reserved space as opposed to the general user space is that servicing marks its own files and directories in a special way.
You can see that this mechanism has similar free space characteristics as using a separate partition or a VHDX, yet the files seamlessly live in the same namespace which is a huge benefit.
This functionality will only be activated on fresh installations of the next major Windows update, so existing systems will not be affected.