cannot update applications because of confused memory Android 5.1.1 pulls this stunt off very so often.

Smart manager states 408 MB free.

But if I try to update some apps, Android imposes me to "Free up space", stating 79.51 MB is needed (in this instance which ended up requiring only 7.5 MB, go figure).  Suggesting to go to settings/storage.

Go there and an initial bar looks like what Smart manager states (used/available), then one second later shifts over to details, but still indicates 408 MB free.

It is confused and transmitting that state to this user.  What is going on?

After reading the answers, I conclude this is rather violent behaviour and incoherent in communication
The OS attempts to maintain a specific threshold of free space, and that's why you appear to have plenty of space to install something but you get the warning and it fails.  As the link from beeshyams says above, it may or may not be 10% of your total internal storage. 

How do you get around it?  Utilize external storage if you are able, or any other strategy you can use to free up the internal storage space.