Apple - How is iPhone Storage automatically cleared up?

App containers include a folder called Caches. This folder can be emptied by iOS when storage becomes low.

iOS chooses apps which you use rarely and apps which have large quantities of cache stored to be cleaned first. iOS shows the app name as "Cleaning…" briefly on the home screen when this process takes place.

There are other system caches which can be cleared too, but caches within containers are usually the largest and first to go.

Is your iCloud Photo Library on? If so, then iCloud could be backing up your photos for you and removing the copies of the older photos that are backed up, from the phone.

You can check that by clicking on Settings -> Your Name -> iCloud -> Photos and make sure that it is on. Click on Photos and check and see if Optimize iPhone photo storage is checked as well.

While application Caches are indeed part of the cleanup process, an increase in free space this large is typically the OS deleting a pre-downloaded newer iOS update. In your case, this would be iOS 11 (which is currently showing at 1.24 GB).

You can also manually remove an iOS update that has been pre-downloaded from within the Settings > General > Storage page if you need some quick space for taking photos or videos.