Alright, figured something out. Thanks to this thread ( Windows 7 Free Space - Neowin Forums - Page 2
You have to run ctts.exe against C:\windows and not just C:\windows\winsxs.
The output for me against C:\windows says
13.2GB of total size in use. And TreeSize agrees that C:\windows is indeed 13.2GB. (We agree both will count hard links and inflate real number)
4.2GB of space is consumed by Hard Links
9.0GB of space is actually used by "real" files. ( I believe this is value of ctts.exe..."real files" here consume about 9.0GB of space.
But TreeSize Free, and Windows Explorer both say that my C:\windows\winsxs folder is 5.8GB in size.
Therefore, the conclusion would be that out of 5.8GB reported, nearly 4.2GB is coming from other areas within the the C:\windows directory. Thus, approx 75% of the space is represented by hard links.
So, I would maintain that if I flat out deleted C:\winSXS that I wouldn't get back 5.8GB of free space, but instead would get back (5.8 - 4.2) 1.6GB of space.
So, if you had a 20GB hard drive...even with the "appearance" of a 13.2GB C:\windows folder, I think actually 9.0GB of space is used, and you would really have yourself about 11GB free if you went to a command prompt and typed DIR. I think you could put about 11GB of more files onto that 20GB drive before it would truly be full. Even though, it would seem that counting up the Windows folder with Windows Explorer means that 13.2GB is used and thus only 20-13.2 = 6.8GB would really exist.
And that's what I showed with my example at the top. I could make it "appear" that D:\winsxs was almost 270MB in size..even though my hard drive itself was only 200MB. All of the tools said D:\winsxs was taking 270MB....but yet I could still copy about 187MB of more stuff onto the drive before it really was full.