Yes, the msconfig Boot listing is only a Boot Menu listing, not the OS itself which will still be on the hard drive taking up space. It might even hold the Boot files still for both files if it was installed first and the second installed OS only updated those boot files to create the Dual Boot menu.
To sort this out please Post a Screenshot ofDisk Management so we can give you the steps to properly remove the old OS and avoid building up a disk junkyard.