For a lot of games, it totally didn't matter (shoutout Ikaruga, 38 MBs! https://www.thedreamcastjunkyard.co.uk/2023/03/the-worlds-sm...)
But for games that took advantage of the extra 300 MBs, pirates had to use all these tricks to get the game down to a CD-R size. They'd compress assets, compress or sometimes rip out the FMVs...I think they might have even split some games across multiple CDs.
That's why DRM cracks me up, the pirates will always figure a way around it one way or the other. (Especially in today's day and age where the live service model is so effective. I'd weep for the AAA single-player game, but I can't remember the last one I played and enjoyed. They've been dead for a long time. Long live the indie single-player game.)