Settings App underreportin avail. memory?

Iphone 4S, iOS 7.1.2: Settings --> General --> Usage reports 0 bytes available, yet I can still download and install apps and files.

Does anyone know if Apple is doing us a "favour" by underreporting memory availability? Is this just poor OS memory management? How do I 'fix' it?

Before you answer I have one request: please make sure that you know what you 're talking about. No educated guesses from anyone who is not a Subject Matter Expert please. Don't mean to be condescending but I I'm just looking for a definitive, reliable, and simple answer. Thank you.