This $399 iPhone SE2 rumor makes sense if, and only if, the following happens:
1 - The market is clearly stated as for the "entry-level" user who doesn't care about performance, camera, and does basic stuff with their phone like calling - including FaceTime calls - and maybe taking picture or two. Trust me, there is big market for that and right now these people (older generation and young kids) are tempted to buy the clearance 7 or basic 8, or worse a used 6 - 6s or 7. Apple would rather sell a new phone and the service(s) with it, esp. AppleCare. They want families to trade-in their older phones and get new ones for the kids... or the grandparents!
2 - Apple would have to get rid of the iPhone 8. With a A11 chip, it would not make much sense at $449 considering it has a single 12MP wide lens camera.
By the way, I'm assuming the iPhone SE2 gets the same lens though maybe without Optical Image Stabilization.
... and anyone who is thinking of a $399 phone with the best camera around is dreaming. If you remember what Apple "sold" with the latest 11 phones, it was the camera. Basically if you want to take great pictures with lots of options, you will pay the price.
3 - Apple would also remove the 8 Plus from the price list. This one because it is a thorn is their side, considering it has a better camera that any phone except the 11 Pros (and previous Xs, XS Max) at a fraction of the cost ($549). Remember, the 8 Plus has the "telephoto" lens which the $599 iPhone XR and $699 iPhone 11 do not have. Getting rid of the 8 Plus would satisfy Apple's Marketing and positioning of the products... you want the 2x optical zoom lens, you pay the price and get the $999+ phones. Great for the bottom line!
Using the iPhone 7 design would be cost-effective. I don't see wireless charging - and a glass back - as an option, so the iPhone 8 design is out. All aluminum is cheaper to make. I'm not sure Apple would use the latest A13 chip, I would think the A12 would make more sense from a cost point of view. We'll see what happens...