The state taxes should not be summed together. Therefore the state refund is inflated by substantial amount.
What state? Every state is different. We cannot see your screen or your tax return.
If you are filing as married filing separately you should be preparing two completely separate tax returns, one for you and one for your spouse. No information about your spouse's tax should be in your tax return, and no information about your tax should be in your spouse's tax return. (You each have to enter the other's name and Social Security number, but nothing else.)
So how did the taxes paid by both spouse's get into one tax return? For that to happen you must have entered something that you should not have entered. TurboTax would not be able to add two amounts together if you entered only one amount. It's not clear exactly what you mean by "taxes paid," but you should have entered your taxes paid only in your tax return, and your spouse's taxes paid only in your spouse's tax return.
Where exactly do you see "Married but filing separately"? The New York Form IT-201 does not use that wording.
If you have further questions, please explain exactly what "taxes paid" are getting added together. What kind of taxes are you referring to? Which of the two separate tax returns has them added together? On what form and line number do you see them added together?