So we can't blame Reolink for this one

Use your imagination.

Under Blue Iris Setting; Storage; select each and check; New, Stored, Alerts, and any other you may have set up and see how much space you have allocated for each next to GB. Add those figures together and total should add up to < total space on hard drive. e.g. 300gb hdd, New folder = 100gb, Stored = 150gb, Alerts 10gb. This will get rid of that over allocated message.

Looking at the allocation graphs is a good starting point. Note if you have "New" and "Stored" on the same drive you are wasting resources and IAmATeaf will admonish you