Hardware RNGs can be one source, but no single source is trusted, and they're all combined in a way where even an intentionally malicious source is lost in noise and cannot actually determine output.
https://blog.cr.yp.to/20140205-entropy.html
Intel could much more easily compromise and attack systems than make an implementation of RdRand which is malicious in this manner.
It’s like the attacks I occasionally see which are like “once we have administrator, we can attack the process because of this insecurity”. Well, yeah, but once we have administrator, we can read the entire memory of the “vulnerable” process and completely control its output too.
I’ve seen in the real world attacks where things were insecure because the PRNG wasn’t given enough entropy (CVE 2008-0166, Coldcard, etc.). I’ve never seen real world attacks where a PRNG was insecure from getting too much entropy.
The value of the iterated hashing method is that it is dead simple and has little dependency on potentially buggy upstream code; it works even in very lightweight environments designed by engineers with no experience in security.