If it's DnD and the campaign takes place in or around Balder's Gate, and it's called BG3, then it's BG3.
Forgive me but it is a simplistic reasoning and certainly not an argument.
For a company, there is nothing innocent in the fact of releasing a cRPG bearing the name Baldur's Gate. Above all, it means wanting to take advantage of the fame of previous games that have had the same name and have become legends in the history of video games.
The name of a game, the rules it uses and where it takes place are far from sufficient to make it seem legitimate in the eyes of many players to associate it with a license.
As I said in a previous comment on this topic, the name Baldur's Gate has, in a way, become the property of the players; and it is the players who will decide if this BG3 really deserves its name. This name doesn't stop where it happens and the rules. It signifies an atmosphere, a history, strong emotions and an indescribable magic which made games which carried this name of the legends.
The only thing WotC and Larian can do is not just trying to make a good game with beautiful graphics, D&D rules and that it happens around Baldur's Gate. Because clearly, it will not be enough and they will be demolished for daring to call it Baldur's Gate.
And if neither WotC nor Larian really understand what the name Baldur's Gate now means in the minds and hearts of the players, as you yourself seem to be unable to do, then the use of this name will be felt as a betrayal and a vulgar marketing and commercial calculation.
