Unfortunately manufacturers are driven by sales - ie they have to appeal to the ordinary consumer, not a tiny niche group of diehards.
... If M4/3 is to survive it has to come up with something compelling that mobile phones don't do, and for most users, I'd suggest there isn't anything in it. Which is why IMHO M4/3 is almost at the end of the road.
So, Ok.. bigger lenses = modest (real) bokeh - Mr/Mrs Average wouldn't notice, or have a clue
Longer telephoto reach - Mr/Mrs Average don't buy big lenses the size of a can of coke.
Low light performance... Video ? iPhone14 does it better. Low light ? an iPhone14 may well win (I just tried auroras last weekend, the phone beat the OM5).
Just give me direct control of shutter speed, f/ratio, and ISO. Let the camera do AF and image stabilisation. The rest is done in software.
IMHO, totally a matter on acceptance of individual.
IIRC Tom has a good writing on this back on DPR. I am totally agreed with his suggestion, better to explain where will be the line of your acceptance before comment on various tools. A reason why the evil E always haunted on various forums, not only the sensors but also the various level of acceptance too.
To me it is very simple. Besides the artistic aspects, I wish my output could look good technically (sharpness, resolution, noise, CA, fine detail, moire etc). I don't mind a US$50 photo tool to produce a soft, lack of reslution, serious noise at base ISO, CA everywhere output but it will be a deal breaker for my few hundred US$ camera and lenses. It is why my current US$250 Samsung A21s is not a camera of my choice as my US$260 GX850 & 12-32 can do many time better output.
The issues are do you need zoom lenses? Or some specific lenses like long, ultrawide, macro etc? Do you do adjustment on setting other than auto or follow the 0ev metering for certain result? If yes, camera can be easier too.
I personally happy with M43 because among the factors, size is one of my key consideration. Phone camera is best on size (portability) but cannot satisfy me on other fronts.
As long as your phone can keep you happy, it should be your best tool. I am asking for more and so it is not for me yet.