But as you know with PC games, there's a minimum spec where anything less will either be unplayable or cannot run the game. And this developer is saying that, with the next-generation techniques that they're experimenting with, new software will force a drastic bump of the curve for hardware that falls out of the support range.
Xbox Series S could be right on the edge of falling off that hardware support cliff when such new technology matures, and so if it does fall over, developers will either A. not use those techniques (which could suck for Xbox Series X) or B. replace those techniques somehow when running on XSS with an older tech or something else that it can handle (which would complicate the game development process,) or C. not make it Xbox Series S compatible and either stream it via xCloud or not support the console.
We're not there yet, and potentially this gen may never get there (Xbox SS still has a lot of power despite it being a baby to XSX, and it has some options to work around the problem,) but Xbox's strategy on relying on scaling to make things happen may be a problem when developers take things up an octave.