What if I cancel my subscription for iCloud storage

You lose the ability to use that storage.

What immediately happens is that you will be unable to save anything new to iCloud as long as you are above the new limit

Anything you have above the new limit will stay there for now

But you should also make to make sure you remove data so you are below the new limit as soon as possible

Downgrade or cancel your iCloud+ plan - Apple Support

What happens when you downgrade or cancel iCloud+

• If your iCloud storage exceeds your new storage plan capacity, iCloud won't sync or update your information. iCloud updates again when you increase your storage capacity or delete information to make more space. 
• If you downgrade to the free iCloud plan, you will no longer have access to iCloud+ features like Hide My Email, Private Relay, and HomeKit Secure Video support.2
• If you pay for both Apple One and an iCloud+ plan, you can downgrade or cancel the iCloud+ plan and just use the iCloud+ plan included in Apple One.

This article is a good start on how to free up space:

Manage your iCloud storage - Apple Support