What are the "loose objects" that the Git GUI refers to?

Solution 1:

An object (blobs, trees, and commits) with SHA say - 810cae53e0f622d6804f063c04a83dbc3a11b7ca will be stored at

.git/objects/81/0cae53e0f622d6804f063c04a83dbc3a11b7ca

( the split in first two characters to improve performance of the File system as now not all the objects are stored in the same directory)

Objects stored as above are referred to as Loose objects.

When you start up with your repo, you mostly have loose objects. As the number goes high, it becomes inefficient and they are stored in a pack file. Such objects are called packed objects.

 git gc

is what you run to pack objects (Usually loose objects that are not needed and few weeks old are also removed and with --prune=<date> option you can force remove loose objects that are no longer needed. Like when you amend a commit. The old commit object is no longer needed. )

Solution 2:

The Git Book explains it pretty well: https://git-scm.com/book/en/v2/Git-Internals-Packfiles

Loose objects are the simpler format. It is simply the compressed data stored in a single file on disk. Every object written to a seperate file.