The physical storage used in Z/OS is
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Internal storage or real storage or central storage or processor storage
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External storage or paging storage or auxiliary storage
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Virtual storage
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All
z/OS storage architecture distinguishes between internal (central/real/processor) storage directly accessed by the CPU, and external (paging/auxiliary) storage used as overflow. Virtual storage is an address space concept, not a physical storage type.
z/OS physical storage consists of internal (real/central/processor) storage — the actual RAM the CPU addresses directly — and external (paging/auxiliary) storage, the disk-based backing store used to hold pages not currently resident in real storage. Both are genuinely physical media. Virtual storage, by contrast, is a logical addressing abstraction presented to programs; it isn't physical media itself, it's implemented using the combination of real and auxiliary storage — so it's correctly excluded, and 'All' is wrong because virtual storage doesn't belong in a list of 'physical storage' types.