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Steam features never fail to amaze me
(programming.dev)
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Nah, usually WiFi but I have tried both being connected via ethernet. It's possible the bottleneck is either devices CPU or something as it maxes out at around 600 Mbit/s compared to over 2000 Mbits/s over internet.
Maybe it's the read or write speed of the drives.
I don't have two great devices to test with but my bet is on the CPU being the bottleneck. I have only used the feature between my desktop (5900x, 2,5 gigabit connection) and a steam deck (a comparably bad CPU, 1 gigabit ethernet or WiFi)
The steam deck also caps at around the same speed when downloading from the internet while the desktop can download at near 2,5 Gigabit speeds.
Oh and both devices used NVME drives.
The CPU on the source used for compression is definitely the bottleneck for me. Internet is faster.
I think it's because Steam compresses the data before sending it and limits CPU usage. I still use local file transfer between desktop and Steam Deck because rarely in much of a rush.