It's going to warm up some when you add displays...but my 5600M MBP warms up way less than my 5500M MBP. The most I've ran is two 4Ks and a QHD. Performance was not significantly impacted. This is a 4K, a QHD, and the built in (all 60 Hz). There isn't a lot of activity other than the photoanalysisd, which is using a small amount of both CPU and GPU (idle GPU power draw is about 8-ish watts in this scenario).
(The system is sitting on an M Rain stand, which probably further helps cooling, and the room it is in is relatively cool. That said, my 5500 model sat on the same stand in the same room and it got much hotter with just two QHD displays + the clamshell open.)
Logically it would seem, given the large installed base of Macs, there would be a need to do so for "years to come". Not everyone will be transitioning to Apple Silicon right away; in the event there is robust demand for the new Macs, that would create supply issues for both Apple and its customers.
That part is a little bit insane indeed, as Apple advertising all 16-inch models as being able to drive two XDR displays would lead one to believe that just one or two lower resolution displays would not have such significant impacts on the system. That said, beyond fixing the high power draw with externals, the 5600M is also vastly more powerful, uses less energy in just about all situations, and yields battery life improvements when using the dedicated GPU on battery power. It's a shame Apple (with AMD) didn't offer a lower priced GPU using HBM with fewer CUs and 3 or 4 GB of memory.