‘Rogue’ trashbin folder – As pointed out by several users, this particular issue can also be caused by a ‘rogue’ trash folder.
Several affected users have reported that they managed to resolve this particular issue by running the System Maintenance troubleshooter to automatically find & fix problems that might cause this behavior.
System maintenance bug – It’s also possible that the issue is being caused by a System maintenance bug that is causing the available space to be incorrectly estimated.
If this scenario is applicable, you should be able to resolve the issue by freeing up the space blocked by System Restore, making it available for general use. It’s likely that the tool is allowed to use a huge chunk of your free space, so it uses it to create a lot of different restore points, instead of deleting older points as new ones are created.
System Restore Points are taking up a lot of space – In a lot of cases, this issue turned out to be caused by the System Restore tool.