jim_p
It's good that you're asking me these, but I'm reassuring you, I didn't eat the free space.
The schema of the partitions on the internal NAND/eMMC follows Android, which splits the flash into quite a few pieces.
There are a lot of partitons on it that are unnecessary for LE, or have no file system, just raw data (eg. kernel -> /dev/boot).
But the same is true for bootloader, dtb, recovery, cache, etc.
For example: /dev/system also varies in size for some boxes, in your case ~1GB, but here it usually only contains the SYSTEM (squashfs) file, which is 120-150 MB in size and is basically a non-writable partition.
But on a USB flash drive or an SD card, it’s completely different, so it’s like comparing an apple to a pear.
There are two partitions, one for boot files (kernel, squashfs) and one for data. And that's the story.