"Other" should just be ignored because its categories that don't fit into the list categories. The metric there is 'unknown' so its not useful.
"System" is likely displaying purgeable data. iOS and MacOS has/can have a lot of this with iCloud services turned on.
Its more efficient to cache data and pull it from there since NAND won't actually delete it anyway. And what I mean is if Apple "fixed" this it would just be them not showing it to you. So for example if you have 50 GB in videos on your phone that are stored in iCloud, you watch them all via downloading them and playing them, then ignore them....they are purgeable. Storage space that is still "used" however its uploaded to iCloud and can be redownloaded if the need arises to purge it from storage. Streaming audio and video causes this to increase too. I notice the Music.app doing this all the time, I have streaming off with cellular. I'll listen to something STREAMED on wifi and on cellular I can still listen to it for quite a while later on cellular even have closing the Music.app. If this data wasn't reused from storage I would need to needlessly redownload it.
APFS on iOS is on MacOS too except its a little bit more clear.
It says I have 106.4 GB free space, 156.31 GB Available and 49.91 GB Purgeable. If you subtract purgeable from Available you get free but I can use more data then 106.4 GB if I need too. Now imagine if purgeable said system....
APFS is a copy on write file system but regardless of that data is store on pages and deleted in blocks so needlessly overwriting or ignoring data that is there is very expensive with battery usage, wear on the NAND and most importantly performance.
If you are actually having a problem with SYSTEM using more than 5+ GB of storage and not being allowed to save more data (ex 50 GB System and you can't download a 10 MB file) then I would start looking very closely at your usage with 3rd party apps. There is likely one or several that aren't syncing properly.
I've read (not first hand experience) of people turning off iCloud and back on actually fixing problems due to syncing issues in Betas of iOS. Might be worth a shot of you experiencing problem.