Can you help me understand how submission storage works?

Are inactive (submissions) forms counted as part of the storage? 

Submission storage is the total number of submissions you can store on your account itself. So for example, in "Free" plan, you are only allowed to have a total submission storage of 500. These 500 are the most recent submissions that you received. If you exceed your limit, the oldest submission data will be deleted, giving way for the new ones to be received.

Inactive forms are not counted as part of submission storage. It is related with number of form count.

For example, in "Free" plan, you are allowed 5 forms in total but this number refers to active forms only.

To understand more about your usage and limits, please follow this guide:

https://www.jotform.com/help/408-Understanding-Your-Account-Usage-and-Limits

If you have any further query, please let us know.