Why Table Lock Escalation is happening in my scenario
Lock escalation is not exactly based on 5k rows, but rather a number of locks pr. level in the locking hierarchy. Once you hit the threshold, locks escalate to the next object level, until you eventually reach table-level which usually has a negative impact on the application. To work around this the easiest, consider how many rows you are affecting in  the DELETE TOP() and how many pages that correlates to. The amount of rows in a page is defined by with width of the row. If you have many columns (requiring lots of byte-storage), your row-width is bigger, then a table with fewer columns. A page can contain roughly 8k-bytes of data.


  "Books Online states that the threshold for a lock escalation is reached when the statement has acquired in excess of 5,000 row or page level locks on a single instance of an object. Also some blogs (which I came across in the Internet) just take 5000 value as a threshold point and not consider other parameters. When rows exceed 5000 an attempt is made to convert a higher-level lock on the object (either an IS or an IX lock) to an S lock or an X lock on the table. If this fails, perhaps because the table is being used by someone else, then SQL Server will back off and try again if it acquires another 1,250 locks on the same instance of the object. Remember that all locks attained must originate from the same object within the statement to qualify for exceeding the lock threshold, so 4,000 locks from tableA that is self-joined (i.e., another set of 4,000 locks) would not qualify." [taken from book "Professional SQL Server 2008 Internals and Troubleshooting" by Christian Bolton et al. published by Wrox ]


Good info in the page-object in SQL Server:
https://www.sqlskills.com/blogs/paul/inside-the-storage-engine-anatomy-of-a-page/

There is an option to disable lock escalation as part of your table-definition. Buts it not advisable in most cases. I'd advise to not go this route until you've tried designing with lock escalation in mind. See more here: What is disadvantage of disabling lock escalation in SQL Server 2016