My guess is the software did subtraction to show you the value of "hidden space" and the only thing going on is that the operating system user that ran the tool doesn't have read permission in some directories where files are stored and cannot show you a breakdown of those files. Basically, it added up all the files it could count, totaled their size (161.5 GB), noticed that the disk says there is only 86.85 GB free and told you that the balance of 250.8 GB was hidden space.
You can test this by opening terminal and pasting this one command:
du -sg /Users/*
This tells the system to calculate the disk usage in gigabytes of each user folder (and the shared folder). This is part of the way that the system protects one users files from being read by another user. Watch for errors showing places you do not have read permission.
You can also see this effect in finder by turning on View -> Show View Options and clicking "Calculate all sizes"
I have three users on this computer and when I use Finder or the program What Size (it shares some common functionality with Daisy Disk and also has a version on the app store as well as a more powerful version that ships separately) the normal measurement cannot see in folders where my "user" has no permission to go.
When I toggle the measurement as a user or as the admin / you can see in the second screen that the accounts starting with a and r have at least 250 folders and about 1000 files each. In this case, they don't occupy much space, but in your case, 250 GB of files are stored in locations where your tool cannot measure them.
Hopefully this helps explain why the tool is showing you hidden files. If you have multiple users on that Mac, perhaps running the tool once for each and looking in the /Users folder, you can locate where the space is being used. If you do not have multiple user accounts, you will have to see if Daisy Disk has the ability to run in admin mode or use the terminal to calculate disk usage where you can run the command as the "root user" by adding a sudo and typing your account's password to let the system grant access to those normally non-readable files.
Mac:~ me$ sudo du -sg /Users/*