This. To add more stuff you change the setting. (When changing from "original" to the "high" quality setting, they convert your stuff to the lower quality.)
Source: did it before, probably still works the same way.
No. The photos that I uploaded in "Original Quality" are still original quality, and they remain that. I switched to 'High quality' because I don't have a Pixel, and it hasn't retrospectively changed the previous ones. That is also what Google probably means here.