The new patches bin size is given as

Patch (1.16.0 CD to 1.17.0) Size 3.6 GB

So good compression would say install is around 6 GB.

Yet with 20 GB of space available, the update says it needs 53,198 MB = 52 GB.
No way a 3.l6 GB patch needs anywhere near 20 GB, never mind over 5) it demands.

Indeed my installed game takes up only 32 GB
So even the entire game doesn't need almost double the space it takes.
Though going off those figures, a full install would need 460 GB to install a 32 GB game.

WTF GOG, why are your installers so broken, demanding space they don't need.
They never used to demand any more space than the game uses

Don't give me any rubbish about temp files needing space,, no temp files can use that space.
I've told your installer where the game files go, just put them their.
I use a dedicated games SSD, a dedicated Windows SSD, and installers on a dedicated Data HDD.
The game needs, and can't use (on my PC's setup) any more SSD space to install, than it takes up when installed.
The patch certainly needs nothing like 5the 52 GB, it's demanding.

Fix the installers.
Pics (Imgur Album Link) of Patch on GOG, and Installer space requirements

Because the patch will modify the old version files and it needs enough space to write the new files, while keeping the old files until the setup process is done. It uses xdelta patcher, as far as I know.

I don't see how you came up with the 460 GB requirement. Typically, it will need at most the double of the game's size.

Edit:
You can also delete the files related to the languages you don't need. Keeping only English, my installation is about 25 GB. But probably the patch will fail if you delete them before. I never use the patches, only the full installers.

That's not how it works. The 52 GB is the whole free space you need for the patcher to do its work, and the new files that will be created. After that, the game will be around the same size (32 GB), or a bit more maybe, but not 460 GB.

The 3.6 GB patch doesn't expand itself to 52 GB. It contains mostly the differences between the old files and new files. For example, a diff file may be only 1 KB in size, but if the file that it needs to modify is 5 GB, then it will have to write a new file of 5 GB.

If you want the installer/patcher to use for its temp folders your games drive, or other drive than the Windows drive, then you have to temporary change the environment variables for your user (something like in the attached image). After you are done, you change them back to the previous values. This is especially useful if you install the games on a mechanical drive and Windows/temp variables are on an SSD. You'll save on those limited writes that SSDs have.

I hope that helps. :)