iCloud Backup

give a look at this

If you turn on Optimize Storage, iCloud Photos automatically manages the size of your library on your device. Your original photos and videos are stored in iCloud and space-saving versions are kept on your device. Your library is optimized only when you need space, starting with the photos and videos you access least. You can download the original photos and videos over Wi-Fi or cellular when you need them. You can use Optimize Storage on your iPhone, iPad, iPod touch, and Mac.

It might happen that all the photos on icloud arent in ur device if u dont have space on device (this mighr happen if u use diff devices with the same acc and u put new photos that goes in icloud but with the device with no space doent go)

About the photos when u goo seetings name/icloud/icloud photos when u go here is optimize storage iphone checked if yes it means the real photo is in icloud and in the phone is a copy of that photo so u can free space on iphone

So if we are always talking about backup u cant put a backup of 40gb to an iphone with 32 gb memory its imposible even if u try 100 times . But if ur photos are in icloud u can dowload them from the icloud.com opening the page from a pc and after using that pc with itunes zo sync the photos

Let me say this that i discovered with my iphone when i restored a backup icloud didnt bring my photos ( i deleted them thinking i had them in icloud backup but no) icloud backup doenst put data om backup if are already stored in icloud so pay attention

Backup is a compresed file u cant open it but only restore it on a device