How to increase unallocated space of SD card

Is it possible to increase the unallocated space of this card?

Not through regular software.

"Unallocated space" is total reported device size minus any partitions. If you don't have any partitions then this is just the actual capacity of the card.

In other words, this isn't a matter of GParted anymore – your card's internal controller reports that it physically has only this much storage.

How can the size of the disk so dramatically decrease? Is this is a known feature of these types of cards?

This is commonly seen on cheap USB sticks that have had large OS images written to them several times in a row (there are some similar posts on this website as well).

Not 100% clear why (the image-writing process doesn't do anything else but write data sectors in the regular way), but most likely the controller just decides that the flash storage has exceeded its write capacity, or something like that. If the SD card was used for storing a full Linux installation on a RPi, it's common for them to die in various ways.

There could be other causes, such as incompatible card reader (possibly?), but this is the most common one.