The picture is in the cloud, there's a thumbnail on the device.
No, the ACTUAL file is on the PHONE. A COPY of that file is backed up to cloud. Google Photos displays a THUMBNAIL on OTHER devices.
If you plug your phone into a computer and navigate to the following path:
In my case it is in the following location, because my default save location is the card.
You will see the actual pictures. They are NOT thumbnails.
Both the Gallery and Google Photos APPs by default look into that folder as well as "...\phone\DCIM\Camera"
They also display images in other folders as well. For example if you have images in the "Pictures" folder it will display those too.