Try this
1. Relaunch Finder
Often, Finder's context menu action gets stuck on a stale state
- Press Option + Command + Esc on your keyboard.
- Select Finder and click Relaunch.
2. Check "Optimize Mac Storage"
Ensure macOS is permitted to handle local purging automatically:
- Open System Settings > click your Apple Account (Apple ID) at the top > iCloud > iCloud Drive.
- Verify that Optimize Mac Storage is turned on. If it was off, turn it on and give macOS a few moments to re-evaluate local space.
3. Quit Background Apps Using the Files
If a specific application (like Pages, Word, or a cloud helper) is holding the file open:
- Open Activity Monitor (via Spotlight or Applications > Utilities).
- Search for the name of the file or the app associated with it, and force-quit any related processes if safe to do so.
- Try right-clicking the file in Finder and choosing Remove Download again.