"what exactly makes it ambitious?" I thought I outlined that it was much more powerful than Intel's prior (RPL) iGPUs both in the first paragraph, and in the conclusion. It competes with the powerful iGPUs AMD has been getting into handhelds.
"AMD as afterthoughts" - Can you explain how you got that impression? I opened by noting how AMD's APUs are extremely competitive if not downright dominant in handhelds (Steam Deck and ROG Ally called out as specific examples) and threatens Intel in the laptop scene too.
"4K 120 FPS" - uh no, you're not getting that on an iGPU unless it's a game from 15 years ago. I suggest checking the very wide variety of other reviewers who run game benchmarks on devices like the Steam Deck or ROG Ally. 1080P or 720P 30 FPS is a good target, and you might need medium or low graphics to get there. That's what I mean by compromised gaming. It's not the same experience as say, gaming on a desktop with a midrange discrete card.
"lesser" iGPUs imo aren't a new sweet spot, the sweet spot is just holding on to older cards that still deliver better performance than these iGPUs. For example check Steam's hardware survey (https://store.steampowered.com/hwsurvey/videocard/). There are more people with a GTX 1080 than a RTX 4080. And PC games are optimizing for stable hardware capability. The latest games are usually playable on Pascal.