In the First Slide that the Mill has Items already made (4 to be exact), when you make items when you have a Full Treehouse they stay in that Mill. You do not lose them, so they don't take up Storage Space until you want them. The mill will only show the 6 oldest items at a time but rest assured your items after the 6 are still there but you will have to pick them up in the order they were made in.