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Of course this would work better. You won't be so limited by the Deck's 15 watt TDP and challenging thermal situation. The strength of the Deck is it's portability, so getting one just to keep it hooked up to a TV permanently would be a bit of a waste.
While you could use holoISO or the actual SteamOS when it comes out, you might want to just put Windows on it in this case. The Steam Deck interface is now available in beta, so you could configure Steam to launch directly into that for a very SteamOS console kind of experience. Using Windows ensures maximum compatibility and on a desktop you won't miss SteamOS features like instant sleep/resume or the Steam Deck specific optimizations.
It's not going to ruin your Deck. Like most computers, the Deck is smart enough to throttle itself and/or shut itself off before it gets too hot.
But you're right in that it won't scale up to 4k very well. From what I've seen most recommend setting output to 1080p even on a 4k TV. Some games might run fine on the Deck at 1080p, but for more demanding titles you'll be better off setting the game to 720p then upscaling to 1080p using FSR.
Also limiting the FPS to 30 or 40 is only really recommended as a measure to improve battery life in certain games when running off the battery. It's not necessary in a docked situation where the Deck is getting outside power.
Another HUGE advantage to PC games over Console games is... Games I bought WAY back for the Playstation 2 and 3 do not work on my current Playstation 4 (Can't afford a PS5 yet). But games I bought at the same time from Steam still work on my current desktop PC and most work on my Deck. So games you buy now for the current Steam Deck will still work on a Steam Deck 2+ in the future.
It does save battery, but that's not the primary reason to lock at 30 or 40. If your game is too demanding to hit a consistent 60 fps then locking it to 40 (if you lower the refresh rate to 40 Hz) or 30 (if the screen is at 60 Hz) gives you consistent frame times (reduced jumping and stuttering).
You're perfectly correct that running uncapped won't break anything. It's just a worse experience.
Abso-freaking-loutely. I still have a floppy disk containing the full version of Commander Keen that I bought long, long ago. There's nothing stopping me from plugging it into my modern PC or my Steam Deck using a USB floppy drive I keep handy, loading up the files and happily playing it (With a little help from Dosbox) same as I did all those years ago.
Console games from about the same time... Well, I bought The Legend of Zelda for NES back then. Could I play it on my SNES? No. Could I play it on my N64? Nope. Could I play it on my Gamecube? Well, I could but I would have to buy it again for the Gameboy Advance along with the Gameboy Player. Can I plug that cartridge into my Switch and play? Hell no. I have to subscribe to a monthly subscription service to have access. It doesn't matter that I've technically purchased the game... What. Four, five times now?
Consoles are temporary. PC is forever.