I have looked at the various other issues regarding used space, but they seem different from my issue. I'm using Samsung Galaxy Ace 3, not rooted. The device has 4 GB internal memory in total, and yet as shown in the image below, the used space plus system memory is more than 4 GB already.
And yet the system does not report being out of memory, presumably because it also detects that it still has 484 MB available. All existing apps are also running without any issue. However, despite this amount of available space, I currently cannot install anything new from the app store.
The other threads I've looked at generally recommends using *#9900# to delete some logs. I've tried that, but it has no effect. And in any case, for those other issues, it is mostly that the used space reported is higher than expected, but the available space and the sum still makes sense, which is not the case here.