Because that is the way the law says to do it:

(courtesy of TGB, Jensen, Bob and whoever else I missed).

The calculation for taxable Social Security (and about 6 other things) still use the FULL amount of unemployment.  The $10,200 exclusion does NOT apply to those calculations.

These are the items that still use the full amount (thanks to "Judy" on another forum that I'm copy-and-pasting this):

• Taxable amount of social security
• Exclusion for US savings bond interest used for higher education
• Exclusion for employer-provided adoption assistance
• Limit on deductible IRA contributions by plan participants
• Limit on student loan interest deduction
• Limit on deduction for tuition and fees
• Limit on rental real estate exception to passive activity loss rules

For code-heads, these are Conformity Amendments for MAGI under Sec. 9042(b) of the ARP Act.