The above Datastore Capacity Summary is interpreted as follows :-
Capacity is the Total Size.
Provisioned Space is the total size allocated to the VMs.
Free Space is the space not used up by VMs yet.
Therefore, with thin provisioning, you can over provision the amount of space to VMs based upon the Free Space at that time. A VM can be allocated 100GB but be only using 50GB. The remaining unused 50GB is counted as part of the Free Space. This can be seen also by clicking on the "Virtual Machines" tab of the Datastore to see the "Provisioned Space" and "Used Space".
I hope this helps.