I don't like the idea of not knowing how recovery could work with this kind of move. Is it a cloud backup, an encryption key, or something? If there's a recovery mechanism, I hope it's open source or something.

I'm also curious whether there's a compatibility issue with BIP-39. The mnemonic seeds, and maybe it could be moved to another type of wallet like Trezor.

This is exactly the dilemma and why seedless wallets came out. First of all, it is true that a seed means that it could be hacked too, considering most people do not store it safely, some even just write it somewhere on their pc and save it in some folder, so if they are hacked, a hacker could reach it easily.

But just because the seed phrase is not 100% safe, that doesn't mean that seedless is safe either. Just like others said, in case of an emergency and in some situations where you can't access it, the money is fully gone, and there is no way to recover it. Which is why I would say that both sides have problems and it's not an easy task at all. I would guess that it is not going to be easy for either of them to be mainstream because of "security" reasons; other reasons will play a bigger part.

I can’t say whether it’s a good idea or bad idea because it ultimately depends on the level of trust you are willing to place in the manufacturer and how much control you want over your private keys and your recovery seed phrase. If I were you I would quietly purchase another trusted hardware wallet and move all my bitcoins from the Keystone hardware wallet to the new wallet, because I don’t understand what is wrong with the Keystone hardware wallet manufacturer. How does manufacturer expect users to restore their wallet if their devices are stolen or become faulty?

If this isn't just another phishing message, then this is a big no from me, I just could never live with a seedless arhitecture, being locked down to one ecosystem forever.

Want to make a backup? you better buy the same hardware wallet! sounds like dystopian. You're just one step away from getting your wallet controlled by them if they ever do something shady because after all, only the device can sign a transaction and the device receives update from the manufacturer.

Even embedded wallet infrastructure provider that use seedless architecture that under the hood uses MPC, still give a way to export private keys.

Maybe the backup is through second devices and export/import information from the first device and the backup capability will be locked down to the same manufacturer device. If the seedless architecture uses MPC, maybe there won't be seed phrase.

I would prefer to stay away from using this type of wallet at the moment. Because they are adding new technology, I don't know what will happen, and the biggest issue I think is how can we recover our funds if our device is ever lost or damaged. I think we need to look at convenience and security separately.

We can easily protect the current system, there are several methods to protect our Seed Phrase, using which we can easily protect our Seed Phrase