You are correct to not believe me, this is the internet. I am out of touch with programming and can't find a good and easy reproducible solution but here is one if you want to test it yourself.
Get wxHexEditor it's a bit broken as I couldn't make it save.
Run it and open the "encrypted" localconfig.vdf from epic, it should be inside "c:\ProgramData\Epic\SocialBackup"
From the "Tools" menu select menuitem "XORView Thru" then select Hex and type ff . Then OK.
This decrypts the file and you can see in the right pane the unencoded text of localconfig.vdf.
If you don't want to scroll the text. Press Ctrl+F, select text, enter an uncommon(cause there are a lot of numbers in that file) appid and click "Find all". It will pop up. For example GTAV has an appid of 271590 and I can't find it in the the uncoded file created by epic.
Ergo the epic launcher grabbed my steam library.