While a 1TB drive for image files is fine, a system SSD of only 128GB is a problem waiting to happen.
The user account, which is always on the C drive, is separate from the program files. It contains caches, previews, user settings of all kinds. This is never removed, even with an uninstall, and it can accumulate to unbelievable sizes pretty quickly. Bridge caches alone can be tens of GB per version - even old and uninstalled ones.
Photoshop needs a lot of free disk space for the scratch disk. This goes to the system drive by default, and with an SSD this will always give the best performance. You can put it on the spinning drive, but that's orders of magnitude slower.
It'll work for a while, and then you get the dreaded "out of disk space" messages.