~/Pictures Bloated Size
The image files (the jpgs) exist only once but are hard linked into both libraries. As the Finder doesn't have an (easy) way to identify the hard linking, calculating folder size on ~/Pictures counts these files twice.

Hard links work within one disk volume only, so if you copy data to a Cloud drive or to Windows, you will end up having two seperate files (and really use 168 GB in your case).