I've only been in Kentucky about 5 years now. Previously lived in Chicago, studied at a college downtown, lived across from Navy Pier, one of the largest tourist attractions in that city bringing in people from all around the world. When I speak of not seeing people use point and shoots, that's where the majority of my experience comes from. Furthermore, I am a young people. Not that I have an all encompassing group of friends, but the ones I do have, have not used or have owned and point and shoot in 10 years min.
Fine, that is your personal experience.
My experinece is different.
But neither your nor my personal experience is relevant.
Only the global market situation is relevant: And this situation is very clear, as it can be easily seen looking at the popularity of film P+S cameras on youtube, and especially on instagram.
With the search function and hashtags a very precise market analysis is possible for anyone interested on instagram. And then you see immediately that hundreds of thousands of film shooters are using film P+S cameras regularly. It is very popular.
For example I am sometimes using a Leica Z2X film P+S. A very rare camera in P+S terms, with much much less units sold compared to Olympus Stylus, Yashica T4, T5, Pentax Espios and so on. The Leica was a niche camera.
Nevertheless you see daily new pictures taken it with uploaded on instagram. And the total number of pictures with its hashtag is in a six-digit number range.
For Pentax it makes perfect sense to start their film project with a cheaper film P+S of that kind, exactly as they have explained in their video:
The market demand is definitely there, the price difference to the used market will not be too big, and such a camera is relatively easy to produce.
So perfect starter for them.
They have done their market research.
To be fair, I did buy one for my 9 yo. She has shot one roll of 12 exp, and moved on to a Yashica 124g.
Then the film P+S has worked very well: As a starter into film photography.