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Many Baldur's Gate 3 noticed that something is off with Act 3 of the game and for a good reason.
As it turns out there is a whole section of the town missing. It is even mentioned several times, most notably during the murder investigation at the temple as the police equivalent mentions she will visit the Upper City first.
Apparently, this part of Baldur's Gate was meant to be central to numerous quests, including Karlach's personal one.
As soon as players recruit Karlach, they see something is wrong with her as she constantly overheats. We take her to Dammon who gives her up to two upgrades and notes that the engine that replaces her heart can't stay in this realm without combusting eventually.
Multiple dialogue lines throughout the game suggest that it is possible to find a solution for it even if Karlach herself is not convinced. In the end, we don't actually get the option to fix the engine entirely and the reason for that is that Larian cut the Upper City from the full release.
According to a list of content cut by the devs, this portion of the city played key roles for Astarion and Karlach's personal quests. In the case of the former, they simply moved Cazador's mansion entrance to Lower City but you can feel the tails here as well with the the odd entrance being on the city's ramparts.
As for Karlach, we were supposed to finally fix the engine through some interactions in the Upper City but since it's not present in the game, she is doomed to burn out, return to Avernus or become a mindflayer.
It is not out of the realm of possibility that the Upper City will be added in a definitive edition upgrade, along with other cut content but until then, Karlach won't have a happy ending.
