It is likely the 40GB download will uncompress to 104GB when installed, completely replacing the existing data. But it is not possible to know exactly how size on disk relates to content, as Larian may have modified how efficiently they store data for patch 8, in order to keep the size consistent.
They certainly have to move to a more efficient storage scheme before adding 2+ more acts at full release, or everyone will need to buy another SSD just to install BG3
