That is correct.. The Windows folder is shown as larger then it actually is mainly because of 2 things
Some files are compressed using NTFS compression, but the uncompressed file size is what is show.
Also there are a lot of duplicates in Windows.. Specially under WinSXS and also other places.. like notepad.exe is located in multiple places.
BUT all this duplicates are actually only stored 1 times on the disk. The file system have a "hardlink" between all file entries.
But the files are listed as normal files to programs. You really need to go way down into the metadata of the file to see that
If you enable the column "Extended - Hardlinks" (if there are MANY files it will take time to show since it will extract this in the background and it can be slow)
and the go into Windows you see that many files have other number then 1 , This number is how many reference there is to the same file.