Files saved to your Chromebook's downloads folder takes up space on your device. When you find you are getting error messages about limited space available on your device, this is one place to start with to delete items that are no longer needed.
Also, if ever your Chromebook needs to be powerwashed in order to fix it or you get a message that your local files / data on the Chromebook will be deleted, this means that your Chromebook will basically be reset and any saved data on your device will be lost.
It would be good practice to routinely backup necessary items to your Google Drive for safekeeping.
When you delete a file in your Chromebook's Downloads folder, it is permanent and can't be
undone. Only delete files when you won't need them later.
For additional details about maintaining your downloaded files to your Chromebook: