low storage remaining - understanding full backups

We recently received an alert from the system that we have used over 85% of the storage capacity.  We're looking into the possibility of modifying our retention policies to free up space taken by older backups, but we need more understanding of how the full backups work.

From what I've understood so far reading through these forums, every backup is treated as an incremental backup looking for changes since the full backup, but they are merged as a full backup to make restoring from any selected backup quicker than traditional incremental backups. I'm curious as to how that affects the disk storage.

For example, one of our server VMs uses about 900 GB of total storage in our VxRail. Each of the backup show as the type as "Full" and the size around 370 GB.  If the retention policy keeps dailies for 14 days, weeklies 6 weeks, monthlies 12 months, and yearlies 7 years, Does that mean that we would be using 370 GB of storage on the data domain for each of those backups (approximately 14.4 TB for all 39 backups) retained for this one VM?