Versus storing the encryption key on a device requiring USB with its many vulnerabilities (even on Qubes OS), storing the key in a dedicated eSE is beneficial.

Beyond that, there have been known vulnerabilities of NitroKey's Librem Key, to say nothing of the Nitro Key App.

Nothing's perfect but I would vastly prefer something like the Titan M2's implementation over a USB key with all of the complexity and attack surface that introduces.