They went for BG3 and the Forgotten Realms (and some folks here seem to forget that BG is just a city in the Forgotten Realms, not the setting itself, the Forgotten Realms is the brand), because they are huge fans of D&D, BG, and the Forgotten Realms, they didn't need this IP, they have their own hugely profitable IP, they WANTED this IP for the love of it.
You're of course free to hold to your rosy view of Larian, and I'll hold to mine.
But you are dead wrong about the name Baldur's Gate. Yes it is just a city in that setting, but in the context of videogames it is the legal title of a videogame IP franchise. So a game titled "Baldur's Gate 3" is by definition linked to games titled "Baldur's Game 1" and "Baldur's Gate 2", whereas it is NOT linked to games titled "Icewind Dale" or "Neverwinter Nights" even though those games are also D&D Forgotten Realms games because those games are not part of the "Baldur's Gate" IP franchise. So this discussion has ZERO to do with a game being a D&D game or a Forgotten Realms game. It is about placing this game within the "Baldur's Gate" franchise.
The Forgotten Realms IS the IP, it IS the Setting, it IS the Franchise, it's like saying Andoria is a seperate franchise to Vulcan and Trill. It's not thr first BG named gane that wasn't about the Bhaal Spawn even. Baldur's Gate Dark Alliance has that honour.
Look I agree they shouldn't have called it BG3, if only to save us from headaches, but WotC likely told them to.
We know it won't use 2e rules, it's the much better 5e rules, we know its not about Bhaal Spawn (although Bhaal is likely in it), we know it's well over a hundred years later, and so far it sounds extremely likely to be TB.
No "Baldur's Gate" is the IP. That's why when Atari owned that IP (yes they did own it) WotC - which owned the D&D and FR licenses could go to someone else to make some other D&D game, but could not make a BG game without Atari's agreement. That's also why WotC fought a bitter legal war with Atari for years before finally regaining the BG, IwD, and NwN licenses back from Atari a few years ago. FR is the setting, yes, but each individual videogame made within D&D/FR is its own separate IP for videogame-making purposes.
At least we agree that BG3 was a bad choice of title, though I don't accept the "WotC made us do it" line. From all of Swen's interviews it is clear he wants to make a game with the "BG3" title. "Baldur's Gate: subtitle" would have been the ethically proper way to go here, and had they done that we wouldn't even be having this debate because I for one would not even be in this forum right now talking about the game. The only reason I am involved in discussing the game, and also why I become impassioned about issues relating to the game, is precisely because it is being called BG3. If it were BG: blah blah, I wouldn't care about the game at all and would ignore the game as a game not for me, much like I did with BG:DA.