No way.
The Steam Deck is comparable to PS4 specs, not PS5 or Xbox Series X. I don't see how Sony would release a handheld in 2023 or 2024 and have it perform similar to a PS5.
If Sony releases a handheld (or hybrid similar to the Switch) in the next 2-3 years, it would probably be around PS4 Pro level. Maybe slightly above, but still clearly below PS5 capabilities. Dedicated handheld gaming is still alive almost entirely due to the Switch. I don't think the Steam Deck will sell any more than 10 million units.
Having such a powerful handheld will not drive people to pick it up. That has really only ever worked with home consoles, and even that is debatable.

The major draw of such a console would be high-end PS5 games, because virtually all other third party games would already be available on Switch. This raises a multitude of issues:

1. Price of the console: The barebones SteamDeck goes for $399 while the handheld-only Switch Lite costs $199. If the SteamDeck is the measuring stick for comparisons here, Sony would be re-entering the handheld space at at least twice the price of Nintendo's machine.

2. Battery life: The games that sell the console would get ~2 hours of playtime per charge and that seems generous.

3. Game sizes: Third parties have not optimized the storage sizes on PS consoles and they aren't going to do that for this hypothetical PS5 handheld either. With individual game sizes coming in between 30 to 100 GB, the purchase of additional storage becomes mandatory, increasing the price of the system further.

4. The games themselves: We are talking about games that are tailor-made to be played on big screens, similar to how certain kinds of movies are much more enjoyable to be experienced in cinema and lose much of their luster when watched on a common TV set. It diminishes the selling power of these games and that's a point that is commonly overlooked. Switch has a monopoly over the portable console market, but this has not resulted in high sales for the AAA third party PS4 games that got ported over. Conversely, less demanding games that had previously been PS-exclusive have been able to achieve comparable sales to their PS counterparts. So while PS gamers who are not about the AAA experiences have bought Switch consoles, there are no serious indicators that there's high demand for AAA games to be played on a small screen.

5. Probably no physical media: I doubt that Sony would go for having PS5 games on disc (home console) and cards (handheld) alike, so this would most likely be a digital-only device.

I'd like Sony to go for it, because I'd like to see the failure unfold, but I don't think even Jim Ryan is that stupid. Point 4 of this post is the central problem, it's basically the question if there's even a sizeable market for a handheld that plays the big PS games. And while there would be cost savings in terms of game development in comparison to the old way of the PSP and PSV, there still remain significant costs for R&D of the device, its marketing and potentially loss-leading on hardware sales to prevent the handheld from being dead on arrival.

Is a PS handheld going to lead to enough additional software sales and PS+ subscriptions to make the whole endeavor worth it? That's for Sony to decide. But if a major consideration is to get in the way of Nintendo and/or appease Japanese third parties, then it would be a much safer investment to moneyhat third party content for the PS5 home console as is instead of going to the lengths of launching a competing device.

There's a reason though that the Switch's biggest advantage is its hybrid nature.  The launch model and the OLED Switch can both be used as a home console and a portable system as a single purchase.  $299 (or $350 when the OLED releases) gets you a home console and a handheld in one.  The hypothetical PS5 portable you are talking about is asking Sony gamers to purchase a PS5 home console for $500 and then another $350 or more to be able to play those same games portably?  That's a bad value proposition.  Not to mention the PSVR2 that has yet to release and will likely cost $300-$400.  That's potentially $1200+ for a PS5 gamer to get the most out of the multi-pronged platform you envision.  That barrage of costly addons you are advocating is the kind of thing that Sega fatigued Genesis owners with.

We just learned through SteamDeck that it is already possible for a handheld device to house a downgraded RDNA2/Zen2 alongside an NVMe SSD at a fairly decent price and battery life. In other words, PS5's architecture is likely "scalable" as I was speculating/hoping it would be back in early 2018.

Downgrading silicon to hit various formfactors, TDP and power consumption targets has been a thing for decades.

So I wasn't really surprised.
In-fact I argued Nintendo could have gone down the same path by opting for AMD mobile hardware before Tegra got confirmed by Nintendo themselves.