I am having this same issue. I was using 56GB (2GB of that was "other") of 512GB on iphone xs. So I figured 128GB of space was plenty. I upgraded to iphone 12 pro max and my other storage is sitting at 56GB. That makes my phone almost full. I had to delete a bunch of apps to get rid of the storage error.
The weird thing is that my messages on my old phone are 17GB, while new phone is only 9GB.
I reset to factory couple times and the other storage is still the same. Quite frustrating.
I can't seem to find any fixes for this online either.