There's absolutely 0% chance that Ragna is right about distances GM
Larian has chosen this way of designing the map to offer the best gaming experience according to them but no one has probably ever thought "distances are not litteral"
The most credible explanation is undoubtedly that they didn't want to create a world as large as an open world but that they wanted to offer a different experience from other cRPGs at the same time. The map is really small and that's why it's not really called an "open world" game.
The act 1 surface map is something like 500m² (let's say 1km² if you include the underdark) while the full map of TW3 are something like 130 km² (skyrim = 40km², RDR2 = 72km², GTA5 = 125km²). BG3's full map may probably reach 10km² at best. The map may look bigger and you play HOURS on a "small" map because the content is very condensed.
The fact that the map design is not a "problem" for everyone does not mean that this statement is false and that we have to go into delusions to explain things.
