I wanted to clarify this, since it was a common misunderstanding last year: "The 2020 software thus included only 1/3 of their distribution yet 100% of their federal and state taxes withheld."

The withholding is against potential taxes owed, for the year, no different than any other withholding. That's why it has nothing to do with "1/3 of their distribution" because it isn't allocable like that.