This is still an issue for me, 2022 MacBook Air M2, 512/24. More than 290 GB free.
Just wanted to mention that booting into Safe Mode does absolutely nothing to speed things along in my experience, I restarted into Safe Mode thinking I could save hours from some comments I saw earlier in the thread and it was a huge waste of time. I should have just left the thing going and not rebooted the computer. Hopefully I can save someone else the same inconvenience!
I don't understand why Apple doesn't improve this experience, it is so confusing to so many people to have a complete lack of feedback for hours at a time.