zRAM consumes RAM only when used, not when just initialized, so if you have 1 GB of RAM and devote 256 MB to zRAM, you'll virtually see 1 GB RAM + 256 MB of compressed swap (clearly visible when running 'free'). When the system needs 900 MB it still only use RAM and no swap. If the system needs 1,2 GB of RAM it will start moving pages from RAM to zRAM. The available RAM will decrease since it will be used by zRAM, available zRAM will also decrease but slower since it is compressed.
This is why zRAM works good in almost every scenario.