That's an even bigger miss on Sega's part then.
Having such kit out in the field, should have given Sega good insight into the "what's hot, and what's not" for (near-future) gaming needs.
Which features are essential, what's low hanging fruit, what's nice to have but (too) expensive, performance <-> quality <-> complexity tradeoffs, etc.
Besides having hardware & existing titles to test-run along the lines of "what if we cut this down to... how would it look?"
Not saying Sega should have built a cut-down version of their arcade systems! But those could have provided good guidance & inspiration.
A lot of casual gamers found early home 3D games kind of confusing and offputting. (Honestly, many still kind of do)
We went from highly evolved colorful, detailed 2D sprites to 3D graphics that were frankly rather ugly most of the time, with controllers and virtual in-game cameras that tended to be rather janky. Analog controllers weren't really even prevalent thing for consoles at this point.
Obviously in hindsight the Saturn made a lot of bad bets and the Playstation made a lot of winning ones.
The secret to high 3D performance (particularly in those simpler days before advanced shaders and such) wasn't exactly a secret. You needed lots of computing horsepower and lots of memory to draw and texture as many polys as possible.
The arcade hardware was so ridiculous in terms of the number of chips involved, I don't even know how many lessons could be directly carried over. Especially when they didn't design the majority of those chips.
Shrinking that down into a hyper cost optimized consumer device relative to a $15K arcade machine came down to design priorities and engineering chops and Sega just didn't hit the mark.
The Model 2 arcade hardware cost over $15,000 when new in 1993. Look at those Model 1 and Model 2, that's some serious silicon. Multiple layers of PCB stacked with chips. The texture mapping chips were from partnerships with Lockheed Martin and GE. There was no home market for 3D accelerators yet; the only companies doing it were folks creating graphics chips for military training use and high end CAD work.
https://sega.fandom.com/wiki/Sega_Model_2
https://segaretro.org/Sega_Model_1
Contrast that with the Saturn. Instead of a $15,000 price target they had to design something that they could sell for $399 and wouldn't consume a kilowatt of power.
Although, in the end, I think the main hurdle was a failure to predict the 3D revolution that Playstation ushered in.