This is the model MS wants to use for Handhelds going forward. They are only making first party Consoles using Magnus to set a baseline for next gen. Then have OEMs build the other form factors.
I don't think MS will mandate handheld support.
what will probably be the case (if this open 3rd party SKU plan is what they're going for) is a compatibility chart for each chip variant them and AMD are working on and planning to sell to manufacturers.
and that compatibility has to be part of the product name.
like how an Asus ROG GPU is still an Asus ROG RTX4070, and that will determine the compatibility, and has a minimum spec it has to meet.
so, say, MSI makes an Xbox handheld. and that handheld chip is powerful enough to be fully Series S compatible. so Xbox 360, Xbox One and Xbox Series X|S games run exactly at Series S quality (maybe with some additional performance due to higher clocks, faster memory etc.)
such a device would then need to be named something along the lines of "MSI Claw - Xbox Series S". so you know buying it, it will play games that say Xbox Series S compatible.
and then the high end console SKUs would maybe be an Asus ROG Xbox Series 2. and that system will play anything up to Xbox Series 2 games (if that's the name they're going with for next gen).
sometime down the line, eventually, there'll maybe be a ROG Ally Xbox Series X, a handheld with full Series X support, and so on.