Free up disk space during Catalina update
So, after a few hours of working on this (mainly making rsync backups) I have it working.

What was crucial was creating a new macos installation and mounting the old disk on that. I didn't really delete any files and df kept showing the same amount of free space, but after a reboot to the original disk the install passed.

I think it has something to do with things being purged by the new macos install (Mojave on an external drive).