How does iCloud Photo Library and Optimize iPhone Storage Work?

Even Apple Phone support can't answer these questions:
How does iCloud Photo Library (Beta) from yesterday's 8.1 update with Optimize iPhone Storage turned on work? (I'm on an iPhone 6)
It only stores your iPhone/iPad versions on your device, which is amazing. Why would you need anything else? It freed up around 8-10GB of space on my device which is amazing. But how does it work when you use it?
When you email it seems to ask you, when sending what size you want to send like it's always done. It gives you the original 2.4MB version. This works like I'd imagine and when I received the test email the photo was correct. In this case I assume it hits iCloud and sends it from there, not your actual device. (Like it doesn't re-download it to email it). Correct?
When posting to Facebook, does it do this same thing? Or is this something Facebook has to build into their iOS app in an update? Or does it just work? Correct?
When posting to Instagram, does it grab the right version. Obviously the phone optimized version should be fine, but when viewing on a Desktop version of Instagram at instagram.com, will it show the right version?
Sometimes I backup photos using Image Capture on the Mac. If I did that right now, would it only grab the iPhone versions? Obviously I can just test it but it'd be amazing if someone who knows these things could explain all of these use cases.
Do you need to be on
In closing it's more of how does this work? Does it work? Why wouldn't you want to use this feature if it saved space and made more sense? I guess I just would love some real clarity since not even the blogs are explaining how it works in every application.
In closing part 2. It does seem to work really well, it's just those fringe cases. I just viewed all my photos on https://beta.icloud.com/#photos and they're all there, easy download of the high res, delete, it deletes from my camera roll on my phone, it's amazing, it works, it's magic. Just tell me what issues there are with storing only low res iPhone on my device and if there are none, game on!
Thanks!

santiagofrommiami wrote:
And of those 4.3GB of backup, my Photo Library is 1.4GB.
So my question is, how do I prevent my Photo Library from being backed up to the cloud, since I already have a backup of it everytime I connect to iPhoto and it copies all those photos to my mac?
I don't know, sorry. It's supposed to work alongside Photos & iCloud, so that photos are stored only once. When it doesn't work you have a couple of options as I see it –
Delete the old backups on iCloud to hopefully start over (I don't like deleting the only backup of anything).
Forget about iCloud backups & use iTunes to backup instead, it might not be suitable if you have no computer etc.
Buy more storage for iCloud.
I don't use iCloud backup, it bemuses me with issues like this, there is no easy way to resolve when it fails.
And one more question while we are at it...can I erase iphoto from my computer now that I have the new Photos app?
That is up to you. If you are happy you do not need it & have a backup of it go ahead & remove it. You can re-download it from the app store if it is already in your Mac App store account.

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