While less seen in europe , this is something you might encounter in some very luxurious hotels around the world, cause the bills can add up very quickly , so they might block high amount (but nothing close to 200%)

Most usually take the original price of booking and add breakfast for each person per day . I think in your case it might be a hotel policy cause I have seen such unusual requirements from properties located in areas where customers are more likely to cause troubles

So as macaron95 said , just skip online check-in , if you use a credit card (and not a debit card) negotiate during physical check-in the amount to be blocked and then ensure they correctly release/cancel/confirm the pre-authorization at check-out , (keep all receipts until cleared by your bank) cause you might run into troubles during the next few days