You have a really pessimistic view of neighbors, I must say. If my neighbor walked up to me and asked for my wifi password, I'd probably give it to them.
IMO the threat 99.99% of people should worry about are botnets, whether created by state-level actors, criminal gangs, or script kiddies. These vulnerabilities are not interesting for those purposes.
Granted, it's going to take longer (perhaps), but chances are you'll never notice until it is too late. Of course, most users won't notice new devices on their Wifi anyway.
People keep forgetting that Wifi is per definition insecure. It's not a point to point technology, and every single packet you send is broadcast in a wide area around you. Furthermore, all current authentication methods, WEP/WPA/WPA2 (excluding WPA3 for now, as it has yet to see wide adoption), have all been cracked in one way or another.
People sure should have a dedicated IoT network, but in the grand scheme of things, home networks are not usually that sensitive, as in no important yet unencrypted service will be exposed internally as it is typically the case in enterprise networks.
That’s a pretty far fetched social engineering scheme if you ask me.
To me the most compelling vector is actually selling compromised smart bulbs online that phone home and do more malicious stuff. In which case, the internal security of the device is irrelevant.
No house-breaking is necessary. I could just go and buy a super fancy smart bulb and give it to you. You don't need your old insecure smart bulb any more so you put it in the bin. I take it from your bin. Now I have access to your network.
Your tech-savvy neighbour is the threat 99.99% of people should worry about, not a nation-state funded intelligence agency.