Folks who are into photography and want to introduce it to their family/kids want to gently introduce the skills of photography while enabling their interest in taking pictures. Smartphones are great at just "taking pictures" but don't offer a lot of creative input. Table stakes like depth-of-field and color balance are either impossible to configure or very difficult on a smartphone. Controlling exposure is very difficult as most smartphones try to just aim for neutral exposure. Software can change exposure settings, and on Android I use a paid camera app that gives me control of shutter speed and ISO to control exposure.

But you're correct that if picture quality and ease of use are the main points of contention, a used iPhone or used Pixel phone is probably all you need to get sharp pictures and decent auto-HDR.

That's not to say that an $850 Fuji body is the only way forward. I'd probably buy a younger kid a used point-and-shoot and buy an older kid one of those cheaper compacts. That Fuji body is almost as expensive as a real mirrorless that I shoot with for paid work.