Could be a great laptop for a very large number of people - people who want a "proper" laptop for web browsing, e-mails, office-type documents whilst being able to stream video/music in the background and manage their files. Playing games, rendering video or batch editing photos are alien topics to these people - perhaps they would do some light photo editing, but likely using Apple Photos rather than Photoshop. An A18 would easily give enough horsepower for those kinds of tasks.
It does raise the questions though, how does Apple not loose revenue & margin compared to selling these people a MBA? Recycling the iPhone chip (with 8 GB Ram), likely an iPad Air 12.9" screen (with reduced brightness?), only 1 USB-C port with no thunderbolt that can only drive 1 display, lower quality speakers, slower SSD (or single chip storage like the M2 MBA)...
With the size of MacOS these days, surely it has to be 256 GB storage?