Yeah, it was free update and it did bring new customers. Extended or definitive or gold or remasters etc, blah blah, tend to bring new people. For all games.
1-2 years or more pass and new people will come in to buy the game and definitive edition usually sounds more appealing than base edition. It won't be free for those who didn't get the base game obviously. And yet it works, this is why companies release editions after years down the road.
Edit: the way it works, Larian could say 'new maps, new content, new outfits etc' whatever, and people usually love stuff like that. Boom, new customers.
