I think much of the problem with the action cameras are two things.
1: The idea that they must always be smaller and smaller, to me they are plenty small, even the original gopro was small enough, IMO if they got a little larger it would not hurt.
2: ruggedness / waterproof. the action cameras can and are often exposed to things you can not ask of a phone to survive, not least due to a phones large screen.
But this are indeed paramount to a action camera in my mind, but i still think a waterproof case would be fine for waterproofing, if a camera was just rain proof i would be okay with that.
My largest gripe with the action cameras have always been the batteries, really 70 - 120 minutes of recording time on a charge are a joke, it should rather be 180 - 320 minutes of recording time ( or more )
A 18650 battery today will give you 3500 - 4000 MAH, thats a lot more then the 1300 - 1500 MAH you see in action cameras today, and it is a standard battery, so no need for the camera maker to design / buy special batteries.
I dont think i will buy a action camera again unless the battery are a standard one, for what i record i can easy make do with a phone and so really all i had to buy was a gimbal, so that route would be cheaper too.
The new insta360 one R, which have a large battery you can buy,,,,,, it is still a special battery but the size of it, it should just have been a dock for a regular 18650 battery you could replace.
I really think insta was stupid with that accessory.