What you're not seeing or understanding:

The Xbox Seried S does not have 10GB VRAM it has 10GB VRAM/RAM that can be dynamically allocated to whatever the game needs.

Baldur's Gate 3 needs 12GB combined VRAM/RAM at minimum. While the Xbox OS peobably doesn't eat as much RAM as Windows does the difference is apparently not 2GB which leaves the Series S with not eniugh RAM to power the game.

As others mentioned for the Steamdeck Splitscreen was disabled, however that was likely done to save GPU performance, unlike the Series S the Steamdeck has enough RAM (16GB) to meet the minimum requirements.