MJPEG is a common encoding format for computer vision cameras. The artifacts associated with inter-frame compression is perfectly tolerable for humans, but it can completely stymie a lot of CV applications. High-efficiency video codecs rely on motion prediction to reduce file size - fine for watching Game of Thrones, but a disaster if you're a motion tracking algorithm.

Given the target market for this chip, it's a perfectly logical and highly useful feature.

The reason for these kind of codecs is also often latency. Efficient H.264 encoding (with B-frames and P-frames) has lots of it. For realtime applications usually a low latency is required.

I chuckled at that, too. I struggle to imagine what would be on the receiving end of that. I doubt most desktop machines could decode a 60fps 4k MJPEG stream, let alone a phone. Maybe they sell an SOC the other side too.