1.17.1 Pre-release 2 added Classical Chinese as a new language, but does not sort together among other Chinese variants.
The sorting position suggests that this is possibly due to it using ISO 639-3 three letter language code "lzh" while other languages uses ISO 639-1 two letter code with IETF language regional subtag, which begins with "zh_". I don't have a good resolution suggestion though, since (according to Wikipedia) Classical Chinese only has three letter code.
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This is not the launcher, this is the in-game menu. Plus, this issue already has a Mojang Priority assigned.
This is not about the specific translation within some language (which crowdin provides), but about the sorting order of the list of languages in the game (and not the launcher).