What happens during "Computing space requirements"?

It is determining how much of the program it must install, and determining what the size on disk will be. There are several contributing factors, like the features the user has selected for installation, and the state of the current system.

Many programs rely on shared dependencies, but if those dependencies do not ship with the OS, or ship different versions of those libraries, the application may have to install them itself. Or, it may be that another program has already installed it.

This means that the actual disk impact of installing a program may vary widely. It takes time to search the disk and registry to determine if the dependency is already available on the system, so the UI displays this message to tell you what it is doing.