When updating an existing installation, the installation program doesn't properly check for necessary disk space when you select the Custom option. In calculating the disk space required, only the selected components are considered while the existing files already installed are ignored. If the available free disk space is less than what is required, the installation program displays a message warning you that there isn't enough disk space.
Before proceeding with the installation, you will need to free up additional disk space or modify your installation selections.
Note that this is a limitation of the InstallShield installation program, which does not provide a method for updating existing installations.