Why 500 KB comes up
500 KB leaves room for a detailed photograph when 100 KB or 200 KB would look too soft on a large layout.
What happens to quality
At this size, many photos can keep fine texture if they are not several thousand pixels wide. Use it when the page displays the image large and the upload limit is still under a megabyte.
Why some images cannot reach 500 KB without resizing
500 KB does not guarantee a perfect copy of a 12-megapixel file. The tool still lowers quality, and then dimensions, until the file fits or the search reaches its limit.
WebP is the default output on this page because it is often smaller than JPG and much smaller than a lossless PNG. You can switch the format if the destination requires JPG.