There's been some confusion about this, but Sony clarified today in a blog by specifying the number of games, and that it's at launch/day 1.

https://blog.playstation.com/2020/10/09/ps4-games-on-ps5-your-top-questions-answered/

So it's basically full backwards compatibility Day 1.
With the exception of these 10 games:

DWVR
Afro Samurai 2 Revenge of Kuma Volume One
TT Isle of Man - Ride on the Edge 2
Just Deal With It!
Shadow Complex Remastered
Robinson: The Journey
We Sing
Hitman Go: Definitive Edition
Shadwen
Joe's Diner

And all the digital games you purchased on the PSN store carry over to your PS5.

That's pretty huge.

Just Deal With It!

That's great to hear. Seems like even fewer incompatible games than the PS1 to PS2 and then PS1 and PS2 to PS3.

I am really curious as to why some of the games, not BC? Licensing issues maybe? I know that Afro Samurai had some legal flounders at one point.

Thought we knew this? PS4 only and not PS1-PS3. I mean if there was any confusion I’m glad we all on the same page. Just isn’t very impressive imo.

Hopefully Robinson The Journey can be patched at some point, It could really use the smoother frame rate of the PS5 for the motion sickness. I bought it cheaply years ago and the atmosphere is pretty awesome, but didn't get far into it feeling sick playing it.

The confusion was mainly over how many games would be playable at launch, because Mark Cerny said that they were looking at the top 100 games from PS4 (ranked by play time) and that he expects most of them to be playable at launch.

Sony later said that most of the 4000+ games would be playable, but the wording again didn't specify when.
So that could have potentially have meant years until all the games had been tested.

We also didn't know if our PSN digital purchases would carry over to PS5.

It's almost as if they're using the same hardware and software.

As expected.

Now we just need to know which games get free upgrades like GoT.

As expected.