The most recent steam update (assuming you're on steam) for me allocated ~85GB worth of game space, downloaded the ~580MB update, copied over the entire 85GB+580MB worth of files from somewhere to somewhere else (rewriting every single game file I assume..?), and then deleted/unallocated the ~85GB space it allocated.
Try freeing up 25 more GB of space and see if it works. Alternatively, delete and then reinstall BG3 from scratch.