BTT takes up a lot of energy on MBP

Screenshot from the Activity Monitor from my MBP 15" (2018).
It is actually taking up more energy than Google Chrome so that's worrying (and avg impact is pretty close)

Is this normal?

Mostly depends on what scripts you are running in BTT and how often you are running them.

does widgets count? because the only scripts I have are the spotify widget and play pause widget.

Yes, what "repeat interval" have you set for them?

0.2 seconds for non lag experience. is that too much?

Yes, you should use higher values. With 0,2 BTT basically constantly needs to run these scripts, and they eat up lots of CPU when being run so often.
For example have a look at the GoldenChaos preset: GoldenChaos-BTT: A complete Touch Bar UI replacement preset it has some very good widgets and the scripts are nicely optimized (as good as possible)

Is there a reason for anyone to ever set it below 1s? Maybe have 1 be the minimum value.

I also know you can set it to 0, but it's not clear if this disables the script or causes it to run continuously. What does setting the counter to 0 do?

0 causes it to never run, unless the "Always run on becoming visible" option is checked - then it is being run once.

There are legitimate cases where very small values are necessary and which don't have a big CPU impact (or where CPU doesn't matter). What costs most CPU is talking to other apps and quering some data from them.

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