The general consensus, based upon many years of experience, is that you should aim to maintain at least 4-6GB of available free space for iPadOS to use for temporary storage.
This is particularly important when performing an OTA system software update - as there must be adequate free-space in which to download, unpack and verify an update prior to installation. As soon as the update has been successfully installed, the OS will automatically clean-up temporary files - releasing this space to the system as free-space. Major version updates require considerably more temporary space than smaller point-updates.
If you are short of space, you can selectively offload Apps. Offloading Apps removes just the Apps themselves - but preserves the associated App data and settings. Apps are typically only offloaded to provide additional temporary storage space - so as to perform a system software update where available storage in insufficient. Subsequent access will cause the offloaded App to automatically reinstall.
https://9to5mac.com/2020/01/21/how-to-offload-apps-in-ios-to-save-space-without-deleting-their-data/
By contrast, deleting an App from the iPad removes both the App and the associated user-data. Unless this data has been backed-up elsewhere, the associated data will be lost.
An alternative strategy where space is short is to perform the update using a Windows PC (with iTunes for Windows installed, or more recent Apple Devices App) or a Mac computer (with iTunes or Finder - as appropriate for the installed version of macOS) to perform the update. Here the update package is downloaded, unpacked and verified on the computer - before the update is installed by the computer on the target device. Notwithstanding the general recommendation to maintain at least 4-6GB of free-space on the iPad, this method requires considerably less free-space to successfully install an OS update on a space-constrained device.
Additional information about creating sufficient space for installation of a software update can be found here:
If you need more space for an update on your iPhone, iPad, or iPod touch - Apple Support