Got to the end of Ethel's cave, where there's a big empty room and the girl in the cage in the middle. Thought some enemies/Ethel herself would jump out once we came in, but nothing happened. Thought maybe it would happen once we pushed the button on the other side of the room, but nope. Instead, we just freed the girl, who we couldn't talk to, and then proceeded to the obvious hey-you-beat-the-big-bad-have-some-loot room.
I suspect this bug may have had something to do with me sending in my invisible imp to scout for us first, since as I understand it, a cutscene was supposed to happen upon entering. I'll attempt to load an earlier save later and walk in first to see if that fixes it.
This is a hardcore bug - a cutscene happens and you engage Ethel in combat (unavoidable) and it's one of (imo) the best boss fights in the EA game - both in design and sequal. It definately hasn't been QA'd enough as the whole interaction is buggy as heck.
Report it as a bug and send in a screenshot/save file:
https://larian.com/support/baldur-s-gate-3#modal
As Klawz mentioned the encounter is generally buggy (several different issues). When I snuck in the conversation didn't trigger until I exited stealth. After the conversation she would be aggressive but stay idle until death.
Second playthrough, and after big patch, I skipped stealth and the event worked mostly as intended.
I didn't stealth my way to her but nothing happened in all the times I tried to do this quest. She never showed up
This line was buggy on both my run throughs.
The first run through, it got stuck, I couldn't find Ethyl after she ran through the fireplace. I let the girl out the cage, but she wouldn't talk to me.
The second run through, I killed her before she had a chance to run through the fireplace, and when I got down to the bottom near the cage, her corpse was there laying on a bridge. Unless there is some reason there should be two corpses. I was able to talk to the girl so, that while immersion breaking, it didn't stop the quest line.
I can add to this that if you kill her in the house she will teleport down to the cage. The corpse end up in the place where she should spawn if you make your way down there.
I reloaded a previous save and walked into the room before sending the imp in, not in stealth, and still nothing happened. We found out that she was sitting on one of the bridges invisible though, so we knocked her out of stealth with an aoe spell. She didn't react to it at all, and we just beat her to death without resistance. We were able to talk to the girl after that and progress the story.
The hag is bugged beyond recognition. If she casts hold person she can cause a resynchronization problem in MP where the host still sees the spells thrown by the other player but....he doesn't. And the game doesn't update anymore for him. One of the players gets kicked out of the game loop. ^^ It might be a problem with the hold person spell more than with the hag herself.