Well said. I don't think the Series S was a mistake but giving it such low RAM was a major cock up.
That said the Series S will be great for Xbox new Handheld porting wise
Series S main use is just for xCloud Series S profiles now. It has no bearing on the Xbox handheld.
It seems MS will not be doing a handheld that mandates dev support for it. The handheld doesn't require any ports to it. It is simply using and optimizing the same GDK created Xbox PC SKUs of games, with option for Handheld Optimization with presets and Default Profiles.
Instruction on using the Game Development Kit (GDK)
learn.microsoft.com
The documentation for the handheld is paired up with the PC development, not the Console development. So for Xbox, the handheld isn't a fixed spec target like a Series S. It makes sense to do it this way as the handheld hardware is improving rapidly every year, every iteration.
GDK created Xbox PC versions that SCALE from PCs, Laptops, Handhelds. GDKX created and optimized for fixed spec Console versions that are also running on xCloud. Play Anywhere licensing to tie both SKUs.
Xbox will have one Magnus Console SKU, maybe two with an S tier, for devs to optimize for, they don't want to add a fixed spec Handheld target into the mix, like how Sony is doing with Canis.
This way while Sony's handheld will be 16 CU RDNA5 fixed spec target for the PS6 gen, Windows and Xbox handhelds would be 12-24 CU RDNA5, then 12-24 CU RDNA6, then 12-24 CU RDNA7, basically updating alongside AMD hardware roadmap. As the games designed for that handheld are designed to scale (Xbox PC GDK SKUs). So Series S no longer has a bearing on the Xbox handhelds since MS isn't doing a dedicated one. The handhelds would be more powerful than the Series S.