Our current repository size is around 25GB. We have online compaction enabled which runs on daily basis, also offline compaction once in month. Does version purge helps to reduce the repository size by deleting versions from /jcr:system/jcr:versionStorage? How to verify whether repository size reduced or not? Does disk usage report helps to verify in case we have shared S3 data storage?
Purging version would definitely reduce the repository size. However, you would need to wait for the compaction cycle to happen for that. If you are on AEM 6.3 and above, online compaction would reclaim this space at 2:00 AM server time (default configured time)
To determine if version purge ran successfully, you can check your error.log files which should contain messages on the outcome of version purge. Also, you can open crx/explorer, click on any page or asset and check its version tree to see on how many versions it displays. Version purge would have removed the versions and they should not be visible in the version tree