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 I can’t even see that setting. 

I can search for it on my settings search, but it just takes me to the photos app and I ain’t got that option. 
 The setting is not in the app. You have to go into the iPhone settings. Just search optimize storage. 
 So I searched it. Tapped it and it did nothing. It just takes me to the photo app settings but I don’t see any optimize storage toggle on that screen.

Does it actually do anything? 
 Yeah it stores low res versions of your photos and videos on your phone and keeps the high res versions on iCloud 
 Right, but Apple actually finesses you into getting iCloud.

Manual backups are punished. 

You want to backup your photos to your computer without iCloud?
No problem, but after you delete them we don’t free up the storage. 
  https://i.nostr.build/WsDqtW25ofEUIM6H.jpg  
 Mmm that’s if you have iCloud storage 😂