The price point was designed to get customers who would not pay for a $1000 computer into using a Mac. Sourcing those 2020 era M1 components, screens, etc, let alone M1's, was probably becoming a problem in 2026.
The Macbook Neo is a modern way to meet that price point. The video ad is more instructional about what macOS is, and how it would work with an iphone the customer may already have.
It does very basic Apple Intelligence (they show the photo editing in the video), but this is not for running models locally (they even show the ChatGPT native app and say "runs all your favorite AI apps")
People complaining about the 8 GB limit are missing who the target market is for this machine. Its a Mac, for $599!