Hello @coleatkinson1
Thank you for reaching out and I am happy to assist you with this.
Yes, once configured, W3TC will automatically offload files to S3, however, It’s recommended to use the “Only Purge CDN Manually” option in the Performance>CDN>Advanced. This option is added because of the huge bills AWS has for invalidations.
We don’t remove media files from the server, we only make sure they are uploaded to the CDN and loaded from the CDN. So once media library files were uploaded to the CDN, they are not deleted from the server to save space.
It’s not recommended to delete the files from the server, simply because you should have a backup if the CDN images break for some reason.
A better solution for this is to optimize images for the web before uploading them to your server. So instead of unloading an image that is 2MB heavy, once optimized it can be around 150kb
If you, however, choose to do this and delete the images from the server once loaded to the CDN (And again this is not recommended), you should also enable the option “Use CDN links for the Media Library on admin pages” in Performance>CDN, to ensure that the URLs in the Media library are using the CDN links.
I hope this answers your question.
Thanks!