No-one outside Valve knows exactly how the Steam sales charts are calculated, and a lot of people have tried to work it out (because it matters to people selling games on Steam to try and get on there), but current best-guess is that the dollar value sold is the primary determinant. Hence how hardware appears on there - it may not move that many units, but each on is worth as much as several full-price games (or dozens, even, as with Valve Index VR device). I don't see any free games in the Top Sellers list, and I'm not sure if they appear on it. It's unclear how free-to-play games work - they do appear on the chart. It could be microtransactions/currency sales, or it could be Valve assigns them some sort of dollar value (probably low).
On the chart I'm looking at, which is the main top sellers list, BG3 is at #2 behind BattleBit (which is selling insane numbers), which yes, is definitely impressive, especially during a sale when it's not on sale. Funny too because a lot of awful internet people and weird Starfield boosters/fanboys were saying that the gay love scene and bear business would drive people away for sure, but the precise opposite seems to have happened. I think what weird haters don't get is that most people who like CRPGs like choice, and what that scene really showed is that Larian are supporting even very "out there" choices that other companies would be afraid of. So even if they aren't into that specific thing, the fact that that out there choice is there, means a lot of wild choices they might want to make may well be.