It was posted elsewhere (I have yet to confirm) that Installer uses the second (or other) partition on the iPhone. This partition has limited storage. If true, which I have no reason (yet) to doubt seems like quite an odd (bad) choice for Installer to use when there is so much space available on the primary (or main) partition.
Although... perhaps they are using that partition so they don't have to "check for available space" in their app.
Take it for what its worth, pure speculation and assumption