In the meantime, is there such a thing as a TB3 to TB4 adapter? I know you say it is backward compatible, but the adapter would make it a "permanent" downgrade. Not desirable if the first device is TB4. Your second bullet point may accomplish this, but then again, is an adapter different circuitry?
Theoretically the circuitry in a TB4 device connector is supposed to recognize a TB3, TB2, USB4, USB 3.1 GEN 3, USB 3.1 GEN 1M USB 3.0, USB 2.0 connection. In other words TB4 is in essence, an adaptor, the long term goal being a type C connector would be compatible with all existing USB/TB protocols. For now port adaptors will be necessary to connect to existing port architectures. But if you connect a TB4 port to a TB3 port it will not give the TB3 device the additional TB4 capabilities of 100W power delivery, and the ability to be distributed through a hub, nor would it make a USB 2 device capable of 40Gbps speeds.
My assumption (I know, bad word) has been that since both TB4 and TB3 can be
daisy chained[, a connection originating with the TB4 port on my M1 Mac mini should be capable of daisy-chaining through the TB3 ports on my LG 4K monitor, although it would be TB3 from that point on. The signal is terminating at the monitor and does not propagate to the outgoing TB3 Type C port or any of the three USB 3.1 gen 1 Type C ports. This could be the fault of either the TB3 cable between the Mac and the monitor or the TB3 port on the monitor itself. Without a TB4 cable I have no way of testing further, and what I am reading about TB4 is ambiguous.
