The upload size must be set in each app used for uploading. The setting in https://photos.google.com/settings works only for manual uploads.
How to set up the Google Photos Desktop Uploader app
Right-click the "Photos" icon in the system tray of your computer (left of the clock). The icon may be hidden, if so click on the up-arrow to the left of the system tray to show the hidden icons
Choose "Settings..."
Choose a setting for "Photo size" (see also "Choose a storage size")
High quality (files are compressed and file size is reduced to 16 MP when the original has more)
High quality no longer counts toward free-unlimited storage as of June 1, 2021 (existing uploads are not affected):
https://9to5google.com/2020/11/11/google-photos-unlimited-backup-ending/ https://blog.google/products/photos/storage-changes/
Pixel 1-5 photos and videos uploaded in High quality will continue to be exempt from this change, even after June 1, 2021.
Original (Full resolution and not compressed)
To help you decide which photo size to use, please read: Google Photos "High quality" vs "Original": What's the difference and should you care
When your storage is getting full you do not have to delete photos. You can convert photos from "Original" to "High Quality". Till June 1, 2021 "High Quality" is free. Photos uploaded or converted after that day will count for storage, but "High Quality" will use less.
After the "recover storage" process, you will no longer have the original size photos. If that matters to you, please download all your original size photos to a computer or make another back-up before starting the recover storage process.
How to convert to High Quality:
Go to Settings
Click "Recover storage"
This is "all or nothing", no selection of individual photos is possible.
Wait until the storage has been recovered. Wait times may vary and take hours/days for large amounts.
After Google compressed your photos to "High Quality" the Originals are deleted to save storage. Because there is "Duplicate prevention" you will have to delete photos and upload them again. This has also some disadvantages:
When you added photos to albums, you will have to do this for each album:
Select all photos in the album, click 3-dots > Move to bin
Keep the empty album, especially when shared: all links will be broken when you delete the album.
Upload the photos directly into the album. See this link.
Everything added in Google Photos to these photos will be lost, for example Descriptions, Edits, Comments, Likes, Favorites,
You may also consider to keep your originals elsewhere and leave Google Photos as it is.
Not yet implemented
These directions work for Android and may also work for Apple iOS devices.
Make sure you still have the pictures on your phone because you are going to delete your backed-up pictures in the next step.
Sign out of your Google account in the Photos app:
On Android, open the left menu, tap to your name and choose "Remove active account".
You will now see only the locally stored photos
Delete the current backup as explained here: How to delete Google Photos Backup photos and start over
In the Trash, click "Empty Trash" - this will permanently delete the items from your library.
Add your account to the Photos app and choose Original Quality in the settings.
The backup should begin.