In short

Downloads Cleanup, in the sidebar after a scan, lists files in Downloads that already did their job.
Three kinds: installers of apps that are already installed, archives already extracted next to them, and files downloaded twice.
Remove them one by one, or all at once with Add All (Pro). Everything goes to the Trash, with Undo.

How to clean up Downloads

Scan a place that includes Downloads Scan My Mac or Home Folder. With Scan Without Full Access, Downloads is skipped: grant Full Disk Access first.
Open Downloads Cleanup Click Downloads Cleanup in the sidebar. The size next to it is what MoreRoom found.
Check each file Each row says why the file is no longer needed. Click the magnifier to reveal it in Finder.
Remove Click the trash button of a file, or Add All (Pro) and then Review & Free Up in the Collector pill.

Downloads Cleanup looks only at your Downloads folder and lists three kinds of files:

Group	Example	Why it’s listed
Installers of apps you already installed	`Figma.dmg`	The app is already in Applications. The row says “App is already installed”.
Archives already extracted	`photos.zip` next to the `photos` folder	Its contents are already there. The row says “Already extracted to “folder””.
Downloaded twice	`report (1).pdf`	It’s the same file as another one. The row says “Same as “file””.

If nothing qualifies, the screen says Downloads look tidy.

One at a time (Free and Pro): click the trash button on the right of a row and confirm.
All at once (Pro): click Add All, then Review & Free Up in the Collector pill at the bottom, check the list, and click Free Up.

Everything goes to the Trash first. Press ⌘Z or use History to put files back.

Downloads Cleanup appears in the sidebar only after a scan that includes your Downloads folder: Scan My Mac or Home Folder.
Without Full Disk Access, macOS protects Downloads and MoreRoom skips it. See Grant Full Disk Access.
Folders you added to Settings › Exclusions are never looked at.