Unfortunately my AppleTV 4k (3rd gen) hasn't held up too well for some devices, mainly Matter IoT devices. It will constantly and permanently disconnect bulbs, switches and other things. The only way to get them working again is to go through the entire pairing process again.The reality is that the Hub needs to be something guaranteed to be always connected at home and an iPad isnt that. If you think they did it to promote sales of the new Hub thing, then why can you buy a cheap used older Apple TV and use that. No one is stopping you from using your old iPad to control your home network.
And, I never power off my AppleTV (unplug) - It always has power and plugged in, and should keep the connections. However it loses them especially from Matter devices (Homekit specific devices seem to be a bit more reliable), but it loses connections to my Kasa and TP-Link/Tapo lights all the time, and they're within arms reach of the AppleTV.
So there are definitely still issues with using the AppleTV as a home hub, mainly with Matter/future devices. Which is a huge problem, as that IS the future.
And sadly, the way Apple is going, I assume the stability and overall quality of their "Home Hub" will be on-par with Apple products these days, meaning, most of these issues will likely not work any better than they currently do on the AppleTV.