Yes, I know the format supports it. The question is, will hardware decoders built primarily around video use cases? And if those kind of hardware decoders end up forming the majority of hardware decoders for AVIF, will we end up in a future where using the full range of the format is heavily discouraged because it won't be supported by hardware decoders?

For comparison, it was possible to do 10-bit video with H.264, but 10-bit video didn't see any mainstream adoption with it because hardware decoders generally didn't support 10-bit H.264 video. Only when newer formats came around and specced 10-bit support as a baseline necessity did we start to see wider adoption for it. And well, the baseline specs (main profile) for AV1, which AVIF is based on, are limited to 4:2:0...

It's not lossless if you have to convert to YUV first.