Installing Mac OS sierra from recovery mode on 2027 MacBook Air

You're welcome.

There are several options available for restarting the Intel Mac in recovery mode:

How to start up from macOS Recovery - Apple Support

❝If your Mac tries to start up from its built-in Recovery system but can’t, it should automatically try to start up from Recovery over the internet. Or you can force Internet Recovery by pressing Command-Option-R or Shift-Command-Option-R at startup. Try each key combination, if necessary. (Each combination also affects the version of macOS offered when reinstalling macOS from Recovery.)❞

How to reinstall macOS - Apple Support

❝Which macOS does Recovery install?

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On an Intel-based Mac:

• If you used Command-R to start up from the local Recovery system, you get the current version of the most recently installed macOS.
• If you used Option-Command-R to start up from Internet Recovery, you might get the latest macOS that is compatible with your Mac. 
• If you used Shift-Option-Command-R to start up from Internet Recovery, you might get the macOS that came with your Mac, or the closest version still available.❞

Storage space does not appear to be the problem here. You have plenty available.

Unless you have some very compelling reason to stick with the very obsolete macOS Sierra 10.12 (are required to use old outdated apps?) I suggest you upgrade to a newer OS. MacOS 12 Monterey is the latest your hardware can run.

Reboot your Mac into internet recovery using the keys Option-Command-R (⌥⌘R). This should trigger the Mac to boot to internet recovery and you might get the latest macOS that is compatible with your Mac.

How to reinstall macOS - Apple Support

How to start up from macOS Recovery - Apple Support