I still think all of this kind of boils down to Upper City and how it was cut. Larian can (and will), of course, always say that every game has cut content and what they did release, was the intended version (saying anything other than that would be a PR disaster). But there's just one little thing. The Community Update #19 - Mechs and the City, from 12th of June, a bit over a month before the game released. It states:

"This weekend, we unveiled the city of Baldur's Gate for the very first time, with a glimpse behind its walls and around its familiar labyrinthine streets. It's been about 20 years since we last had a pint in the Elfsong Tavern or crawled through the sewers beneath the city streets and, as you might have spotted during the PC Gaming Show, many of these locations are back, and many news ones are waiting to be discovered for the first time - giving you a chance to explore the menacing roads of the Outer City, the opulent estates of the Upper City, and the dark alleys and pubs of the Lower City."

Where is this Upper City in the game? I am willing to bet actual money that Karlach's questline would have been featured heavily in that place, but for some reason (technical, performance or similar, most likely) it was cut, and some of the content was hastily plopped down to lower city, cutting the others either short or out of the game altogether. They did move up the release date in order not to compete against Starfield, so maybe something got seriously bugged out just before and they "did all they could" for BG3. Poignant, and fiery.

Maybe they will re-add it in the (most definitely) eventual Definitive/Tadpole/Goty/Whatever edition, maybe they will not. But there will be a definitive edition, as there's absolutely no reason not to. They can make it free, they can make it paid, but they will make it, and they will make a lot of money from it too. And good press as well.