Because Baldur's Gate with a number atached to it is the name of the franchise,not the city anymore in terms of games,that's why SoA is not in that city but is still a Baldur's Gate game of the same franchise.
If you don't want a game that takes places on the city of Baldur's Gate be related to the BG franchise you name it with another name (not with the number) like Baldur's Gate:Dark Alliance or Baldur's:Gate Descent to Avernus.
Small correction: You mean that the Baldur's Gate referred to with "Baldur's Gate 3" is the name of the series, not the franchise. The franchise is everything under the parent umbrella that the Baldur's Gate series is a part of, and includes Dark Alliance and Descent Into Avernus.
It's noteworthy that Larian's "Baldur's Gate 3" not only has nothing in common or relation either in narrative, characters, gameplay, or visuals to the Baldur's Gate series, but it literally is officially the sequel to Descent Into Avernus. Larian's "Baldur's Gate 3" is officially not a sequel to Baldur's Gate 2, but to Descent Into Avernus.
And it shows that there is not even the faintest relation or familiarity between Larian's "Baldur's Gate 3" and anything that Baldur's Gate 1 and 2 represent. So, why is Larian calling their game "Baldur's Gate 3"? They are literally lying by doing so. It is false marketing. And since the only purpose for it can be to capitalize on Baldur's Gate series fans' hopes and excitement at getting another Baldur's Gate game (which they are not getting with "Baldur's Gate 3"), the dishonest use of the Baldur's Gate series name by Larian is literally a cash-grab. It is actual fraud because every single sale that occurs directly as a result of the game being called "Baldur's Gate 3" is money that Larian tricked somebody into given them with a lie.
There is no connection to the Baldur's Gate series in "Baldur's Gate 3". That means it isn't a Baldur's Gate series game. Larian's upcoming game is a D&D RPG using the D:OS2 looks and formula which Larian are copy and pasting into a Forgotten Realms setting... but it isn't a Baldur's Gate. Not technically, not narratively, visually, certainly not gameplay-wise... nothing, absolutely nothing about it is associable with the Baldur's Gate series and what the series' name represents.
So, calling it "Baldur's Gate 3" is truly a lie and fraud. The name must be changed. Larian could not change it, just like a person could rob someone and not refuse to acknowledge any wrongdoing on their part. But, where ethics matter, the name of Larian's game must be changed.