I already run Steam in Docker for this reason, with its own home directory mounted as a subdirectory of my real one. Even before games swiping my homedir I was worried about Steam wiping my homedir, as it's already done once in the past. [1]

Though ironically that means I can't use the new Proton runtime thing ("Soldier runtime" I think?) that sandboxes games via user namespaces, because my distro doesn't build the kernel with userns support so it would require me to give the Docker container more privileges.

[1]: https://github.com/valvesoftware/steam-for-linux/issues/3671