UmangKhaitan hey 👋
These photos still store in local storage and can be accessed outside of Google Photos in third party gallery apps or even the files app. Google Photos is just the default viewer and handler.
As you mentioned you can also just turn off backup and still use Google Photos as normal, the difference is it just won’t take up your allocated Google Storage.
If you don’t want to turn off backup and you also use other services such as gmail and drive anyway then you should consider a higher tier storage option.
I do agree though, it would be great to see a Nothing gallery app, what features it would have, and how it would look.