By switching to Google Workspace Business, I will have 1 TB storage per user. If a user will share his storage with a normal Basic Gmail user who does not have that much storage, can the basic user read the whole shared folder?
With the Business option, each user has 1TB of storage available. After 5 users there is no limit of 1 TB and the organization has unlimited storage to use.
Sharing of storage from Google Workspace is not possible as you are suggesting it here. But you can share certain files from Google Drive (by link) with another person that needs to work with you on the documents.
To find more information about Google Workspace in general click here.