What is the size of your "/data" partition, and how much of that is free? If you can't easily see that (and the system storage app is notorious for describing things in a confusing way, as you've found) try installing a little app called Storage Truth and seeing what it says.
The /data partition is the part of the phone's internal storage that's accessible to you, so the size of that partition is the maximum space you could ever have immediately after a factory reset and wipe of the "internal SD card" (which is really a part of the internal storage pretending to be an SD card). It will be a lot less than 8GB. The other partitions contain the ROM, kernel, system cache partition, and lower-level firmware, and their sizes are fixed. Most likely a large part of what the device is calling "system data" is those partitions (not just the space used within them, but the entire partitions, since they are inaccessible to the user).
What else the phone calls "system data" will depend on what LG have decided to bundle under that label. It might be updates to system apps: because the ROM is only modified by system updates, updates to individual system apps via the Play Store are stored in the /data partition the same as your own downloaded apps. It might be including data stored by those apps as well, or it might not. If what it is calling "system data" is growing then there will be something like that there (or maybe system log files, but I've never known those to become large myself). To some extent it doesn't matter: you can uninstall updates to system apps if you want or clear their data, so what heading the LG storage menu puts these data under doesn't make any difference, apart possibly from confusing the user.
