But all I see is either gigantic phones, or 3 inches phones like this one so tiny they're barely usable as a smartphone. At that point why not just buy a dumb phone?
That's much larger than the SE (4" screen, 125x60x7.5 mm, 110 g compared to 5" screen, 140x70x7.5 mm, 150 g for the 2020 SE). Which is a really nice form factor, and well suited for apps, but not so good for web browsing.
Not necessarily if they're talking about the diagonal of the phone: the SE1 has a ~138mm diagonal, which is ~5.4".
At 156mm the SE2 is a bit above 6.1".
Though by that measure the Palm here is hardly "3 inches", it's 4.2".
It's a one year old phone, but at the moment it's on the latest version of Android. Plus it has a headphone jack.
But like the iPhone, it's a greased piece of glass, so it definitely needs some sort of case.