Ah, yes, I do agree on the quality – it certainly can't compete in any way with high-quality software or dedicated encoders.
But arguably it doesn't have to; many real-time applications (e.g. surveillance cameras) have local bandwidth to spare and/or don't care too highly about quality, and compatibility with older viewing devices without re-encoding is a priority.
If compatibility is a priority and bandwidth isn't an issue, MJPEG is still the way to go and is by far the most common encoding I see in security cameras.
On the other hand you could get cool stuff from the video encoding hardware, such as access to motion vectors on the cheap: https://github.com/osmaa/pinymotion
I wonder though if the OpenGL ES3.1 compute could be used for this purpose on it.
If bandwidth ain't much of an issue, can just dump frames to a separate device for encoding, aside, Can't imagine someone using a pi 5 just for camera usage (aside from projects needing cameras)
Maybe not only for cameras, but also for cameras. And when doing other things simultaneously, a video encoder not hogging all processing power becomes even more important.
Last time I tried to encode a video from H.264 to HEVC (hw-accelerated) on Linux it was such a pain to get to work that I eventually gave up and simply accepted the performance hit. I'm sorry, but I'm not gonna recompile ffmpeg so that it works on my machine. Considering that most RPi-users probably use a Linux-based OS this is IMHO a sensible decision.
Well it's not that uncommon to use a version of ffmpeg with more features enabled for a specific purpose. For instance my jellyfin server uses jellyfin-ffmpeg[0] to do hardware acceleration, even on my Pi.
For hardware acceleration it's probably easier to use gstreamer, depending on what device you are using to decode. But then you have a whole new problem.
Well, to quote Gordon Hollingworth on the original post:
"In future we’ll have to do something, but for Pi 5 we feel the hardware encode is a mm^2 too far."
Also, Raspberry Pi Foundation and Broadcom have been really working together on successors since the... BCM2787 in the Raspberry Pi 3, if I remember correctly? Broadcom still reserves the right to sell to anyone, but the Pi is still the primary customer for those specific chips now.