Wow 7GB on the root partition? Really? That sounds unusually large to me. Are you sure you aren't including /home in that? Try:
if you are unsure. But if you are sure, then ya, I suppose in that case, you would need 7GB of RAM + another few hundred MB for the OS to work with (at least).
If you know where most of that 7GB is located (like if it's in /root or something), you could try modifying the script to mount that particular folder somewhere else at boot, or modify the RAM Session's /etc/fstab to do so after the script has finished running (modify /var/squashfs/etc/fstab to point to a device for that folder, then reconstruct the squashfs image), exactly like the script does with /home, but as it stands now, the script isn't written to handle something like that.
If you were to run the script, you could see just how large your /live/filesystem.squashfs image had become. I haven't used the script since I've written it (have been running my OS from an SSD instead), so I don't remember if squashfs images do any kind of compression, and what the compression ratio might be. The best way to check is just to run it. If it's too large, and you can't use it, run the uninstall script and it will be deleted.
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