Unclear iCloud Photo Library Feature
Since your goal is to free up space, you can configure your iPhone to only store thumbnails of the photos you have in iCloud Photo Library rather than the full-resolution images.

This is configured in Settings > iCloud > Photos > Optimize iPhone Storage (as opposed to Download and Keep Originals)

See this iMore article for more information on optimising storage.

It is not currently possible to completely remove photos or videos from one device when using iCloud Photo Library. This is clarified in the iCloud Photo Library beta FAQ:


  Deleting a photo or video from your Photos app will also remove the
  item from iCloud Photo Library and from your iCloud storage
  allocation.


The solution would be to disable iCloud Photo Library, allowing you to delete certain photos from certain devices, but then new photos would not be synchronised automatically.