In the Baldur's Gate III announcement trailer, we can see what seems to be a human be transformed into a Mind Flayer.

What is happening there? Are Mind Flayers created by transforming other creatures? I thought Mind Flayers only created Intellect Devourers, as written in the D&D 5E description, but not other Mind Flayers.

Unless it is more basically a polymorphism spell at hand?

It is a process known as ceremorphosis.

Several articles about the Baldur's Gate III trailer indicate that the depicted process is indeed ceremorphosis.

Rock Paper Shotgun touches on it:

They call it Ceremorphosis. The excruciating seven day process by which a humanoid might transform into a Mind Flayer. Stick one illithid tadpole in the brain and one week later you’ve got an octopus for a head and a craving for more grey matter. [...]

Before we chat specifics: that reveal! Blimey. Ceremorphosis might be the inspiration, but when crafting a 90 second teaser trailer you’ve got step on the gas a bit, so the process is accelerated. A week of suffering becomes a frankly horrendous slice of Cronenbergian body-shattering that is so gnarly the uncut version of the teaser was not shown at today’s Stadia announcement. I know Google want us to give their streaming tech a thumbs up, but not when that thumb is being snapped 90 degrees by a mind maggot.

It's confirmed by the devs themselves in this GameSpot article, in an interview with Larian Studios head Swen Vincke:

For anyone who's not familiar with Baldur's Gate, as you said before there are people that are new to this franchise, can you kind of break down what we're seeing in the teaser that will catch us up and get us ready for Baldur's Gate 3?

[...] There's dead bodies everywhere and then something's happening to this knight and he's actually undergoing a version of what we would call accelerated ceremorphosis, which is basically a way of reproduction that these creatures called the mind flayers have.

They stick a tadpole in people's heads, that tadpole grows, and then it turns a human being or any humanoid being into a mind flayers and these are the guys you may know from Stranger Things, maybe. They're these psyonic creatures with tentacles and very intelligent but they're hive creatures. They have elder brains that command them.

They used to have an incredible empire called the Mind Flayer Empire but things went wrong, so they've been in hiding ever since in a place called The Underdark, which is like the deep underground of this world of Forgotten Realms. Somehow, they've managed to get people into Baldur's Gate that are turning into mind flayers and you see some shots where they're flying in the distance, so it's an invasion of mind flayers, too.

You can find more information about the process in the Forgotten Realms wiki article on ceremorphosis, which cites books from past editions as well as Volo's Guide to Monsters.

Larian Studios co-founder Swen Vincke also jokingly recreates the meeting with Mike Mearls and Nathan Stewart in the first Community Update video by Larian Studios for Baldur's Gate 3. In it, they do discuss the process of ceremorphosis.

Oh, it's way worse than Polymorph

The basic principle of how Mind Flayer (aka Illithid) reproduction works is this:

Mind Flayers produce batches of tadpoles which live in the Brine Pool of an Elder Brain--being fed brains, eating each other, and being eaten by the Elder Brain for about 10 years. Those that survive are removed from the brine pool and put through the ceremony of Ceremorphosis.

Mind flayers don’t reproduce in the traditional sense. Instead, they lay eggs from which hatch tadpole-like creatures that are used to make more of their kind through a process called ceremorphosis. First, a captured humanoid is rendered docile by a blast of psionic power. A newly hatched tadpole is inserted into the victim’s cranium, usually through a nostril or ear canal. The tadpole grows as it devours the humanoid’s brain, attaching to the victim’s brain stem and becoming its new brain. Over the course of a week, the humanoid body changes form, and a new mind flayer comes into being.

Volo's Guide to Monsters

So, while the process appears to be accelerated in the video clip...that's what you're seeing.

A number of different published sources mention the process

The adventure

Waterdeep Dungeon of the Mad Mage

has a (very) brief passage on what is happening in the clip (located on

level 19

)
has this passage, hinting at what we see:

Before he was transformed into an illithid by the process known as ceremorphosis, Captain N'ghathrod was a spacefaring elf. [...]

Additionally, the other pieces of lore we have on the process of transforming a creature into illithid kin, from the published books, is in

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  Volo's Guide to Monsters:

  
  
  

  
  

  Ceremorphosis

  
  
  

  Mind flayers don’t reproduce in the traditional sense. Instead, they lay eggs from which hatch tadpole-like creatures that are used to make more of their kind through a process called ceremorphosis. First, a captured humanoid is rendered docile by a blast of psionic power. A newly hatched tadpole is inserted into the victim’s cranium, usually through a nostril or ear canal. The tadpole grows as it devours the humanoid’s brain, attaching to the victim’s brain stem and becoming its new brain. Over the course of a week, the humanoid body changes form, and a new mind flayer comes into being. [...]

  
  

  
  


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  the Monster Manual entry for a mindwitness:

  
  
  

  
  

  If the beholder can be stunned and brought safely to the brine pool of the elder brain it can be converted through ceremorphosis into a mindwitness. [...]