WinSXS folder is the component store of Windows vista and later operating systems. Windows OS stores all its core components to WinSXS directory. The WinSXS folder is the only location that the core system components found on the system and all the system files you see in their usual locations, in the windows directory structure, are hard linked back to the WinSXS folder. WinSXS folder is the only location that OS stores its components; everything else are just hard links. To prove the later point you can use the fsutil to check the hardlinks of a system file:
So, WinSXS starts large! But why is growing larger? The answer is updates. Every time a binary updates, a new version of the whole component is released and the old version is retained for reliability reasons in the component store. The updated version of a component is projected to the system (hardlinked) but the old version is retained with no hardlinks. This is the reason an update can be safely uninstalled from the system. If you uninstall an update from the system the next higher version of the component is used and other component changes may also be triggered as a result of dependencies.