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Same can be said about the Switch - the Nvidia Tegra chipset used is absolutely ancient by modern standards, yet in the Switch it's used to much higher quality than in any other device with the same or similar chipset.

A lot of that has to do with being able to run at high sustained clock frequencies by designing in an adequate thermal solution. Phones just don’t have the space to allow for that, so games have to be designed around throttled performance.

This is a combination of costs and timeline. Oculus Quest development started in 2016 or 2015. Snap dragon 835 released in 2018 and Quest shipped in 2019. Now, Quest shipped 6 months after 865 so it would have been possible for Facebook to co-develop Quest with Qualcomm and potentially ship with an 865, but due to various factors (VR is a small market, Facebook doesn't have a close relationship with Qualcomm like console manufactures have with AMD, Quest needed to be "cheap")