And the relationship between power and performance isn't linear as processor voltages climb trying to squeeze out the last bit of performance.
So if you want to take a 105W CPU and ask it to operate in a 65W envelope, you're not giving up even 1/3rd of peak performance, and much less than that of typical performance.
AMD Ryzen 9 5950X: 20.6W for a single core at 5050MHz, 49W for the whole package. (And it’s generally the package figure that you care about.)
AMD Ryzen 9 5900X: 17.9W/54W at 4875MHz.
AMD Ryzen 7 5800X: 17.3W/37W at 4825MHz.
AMD Ryzen 5 5600X: 11.8W/28W at 4650MHz (though the highest core reading is 13W, at three cores loaded).
You’re both correct: by simply restricting that power envelope by 40%, you shed a lot less multi-threaded performance than people realise, and no single-threaded performance.
Look at the 5950X figures, and you observe that at about 120W, it can run 6 cores at 4,650MHz (27,900 core–MHz), or 16 cores at 3,775MHz (60,400 core–MHz).
Expressed one way: by dropping the frequency by 20%, power per watt increased by around 2.7×.
Expressed another way: let’s skip a 65W envelope—put this particular 105W chip in a 40W envelope and you lose only 20% of your six-cores performance. Seriously. But I’m not sure what the curve would look like if you load all 16 cores at a 40W envelope, what speed they’d be going at.
(But do remember that “TDP” is a bit of a mess as a concept, and that we’re depending on non-core power consumption being generally fairly consistent regardless of load.)
As a petty "Take that", I dropped the max frequency from 2.0 GHz to 1.0 GHz. I ran a couple benchmarks to prove the cap was working, and then just kept it at 1.0 for a few months, to prove my point.
It made a bigger difference on my ARM SBC, where I tried capping the 1,000 MHz chip to 200 or 400 MHz. That chip was already CPU-bound for many tasks and could barely even run Firefox. Amdahl's Law kicked in - Halving the frequency made _everything_ twice as slow, because almost everything was waiting on the CPU.