That doesn't magically fix the Qualcomm GPU or the drivers.

The GPU is fine and the drivers Valve are using, if their past hardware is any indication, will be open source. Doesn't magically fix them, but it does allow for Valve to fix them.

If valve can convince Qualcomm to open source their GPU drivers I will eat a banana peel. They would need to write a new one from scratch (or reuse freedreno, but those are going to have performance issues).

Not the first time Valve funded the development of FOSS drivers. They've already done so with Intel's Vulkan stack on Linux, AMD (AMDGPU) and Nvidia (NVK).

SteamOS's core functionality leans heavily on Mesa and there's been a lot of commits for the Adreno 750 lately, mostly coming from Linaro.

Fair enough. The problem is usually in terms of getting enough documentation and help to do this in a cost effective manner. If they manage to pull it off, I will start to second guess every phone OEM who seems to not go down this road.

I don’t think you will be on latest nightly. LTS are good and stable, if FEX is targeting those specs I don’t see a stability issue.

It kinda does. Qualcomm's DirectX drivers were the big issue, and Valve is using Mesa instead.