"Every server-side entity affecting a client needs to have its state broadcast to that client" is true, but you're presuming all those entities are going to be server-side, which in most cases they're not.

Yes I can imagine if you put all the state on the server and broadcast all that to the clients, you can easily use 20mbps for a massive game, more like 200mbps. Would also imagine it'd be insanely laggy, and not because of the bandwidth itself. At that point you're probably better off just streaming the video, cause at least clients can uh "parse" that quickly.

A typical quake style FPS netcode like Counterstrike, Apex Legends, Titanfall etc. would have all gameplay affecting objects (bullets, missiles props whatever...) as server side entities.

On the client these entities are usually interpolated, except the local player character, which has client-side prediction (eg. optimistic execution with rollback to apply server corrections to maintain server authority).

So it's not at all unusual to suggest that all gameplay affecting objects would be server-side. In this network model, that is the default approach.

The exception would be for entirely cosmetic FX or cosmetic debris objects that don't push back on the player.