It be Steeeee!

What happened to their leg?

Well it lost its leg before it became a balloon. I’d have to establish the world lore of Garein as well to explain why it’s a balloon now, but basically Stee was a Rito on the verge of death after being mauled by a Lynel (who also cleaved its leg off), was rifted to Garein as a balloon, at the cost of losing all memories of its past life.
After mishearing Steve as a name suggestion, it went with the name Stee and has been quite happy with its new life, using it/its pronouns and speaking in third person (intentionally)