What Déjà Dup is asking for is a drive (not just the free space) that is at least as large as what the backup would take if uncompressed.
The way it knows this size is that before running the actual backup, it runs a sort of simulation and gets to know the entire amount of data to be backed up.
So in practice how many complete backups can fit inside a partition that Déjà Dup considers "large enough" depends from how compressable are your files.
The above was confirmed to me in the Deja Dup support chat by Michael Terry, who is the main developer. For reference, the code implementing the check is here - and indeed, it compares the
total size of the disk to the space required for (uncompressed) backup. Notice that (as clarified, again, by Michael) a check on
free space is also run, few lines later, a failure of which triggers a separate error message.