WotC knows that their large, profitable customer base forms associations about their products and franchises, and will compare future products to past ones. They want to maintain standards and integrity of their games.
And they trusted a studio responsible for best selling cRPG in recent memory with their most valuable PC IP. What do they really have to loose in that deal with the adaptation not being faithful? Maybe Larian will make some of WotC fanbase into their customers, and maybe WotC will convert some of Larian's fanbase into their customers. All while hopefully making a neat profit of BG3.
The poor quality of the product you mentioned, despite making it through the approval process, should serve as a warning to gamers who might still associate these brands with quality. I think many customers still do, which is why this process is profitable. Eventually, though, customers (like many on this forum who know D&D from editions before 5E) will realize that WotC cannot be trusted to choose good partners, and the brand will lose value. This has already happened to some of their other products.
That's possible of course, but with BG3 overwhelmingly positive reception from players and critics one can assume it will be considered "a quality product" even if some hardcore fanbase will be disappointed. Maybe it will even replace D:OS2 as "best RPG of all time!" Anyway, what was the last decent D&D PC game. NWN2?
