This is what I ended up with for shrinking Catalinas back to minimum -
I also find it is good to go into Apple ID and make sure all the Apps are unchecked (save maybe Keychain unless you need some of the other stuff) and reboot if you did uncheck Apps before shrinking.
I remember having seen the same.
One thing to try is to add an extra virtual disk and use that for the upgrade (not entirely sure what you would have to do to convince macOS to use the extra disk) and remove the disk afterwards.
Reclaiming the disk space can be done as well, but it will probably mean that you have to write out zero's and use the command line afterwards to reclaim the space.
for more tips on that.
edit: nevermind, use gringley's reply, his/her answer is the complete steps.
I had forgotten to hit "Post" on my reply before I walked away and just hit it to see that answer is betterer 😉