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I’d be happy with an updated psvita with better capabilities. It can keep its form factor but with the ability to stream to the ps4/5 or to the tv itself through use of Bluetooth or screen casting.
Sadly I’ve moved past the need of a ps vita 2. This is because a lot of ps4 and 5 titles have been ported to leading handhelds via pc clients, which since sonny dropped support for ps vita do early without much competition. Back then can’t see them succeeding now
I think they can just pass that problem by creating exclusives for that console, at a lower price. Just like the dynamic between the Wii and the DS back in the day. But it'll definitely be hard, it can't be just a Sony "steam deck" per say.