Nothing wrong with this approach, it's what Sony has been doing very successfully for a number of years.
Can't afford the latest a7Rmk3? That's fine, maybe we can tempt you with the latest and cheaper a7mk3? Oh, that's still not cheap enough for you? Well look, we have an older a7mk2 still available for sale! What, not even that is cheap enough for you? No problem, we've got you, here is an OG a7mk1!
And Sony is still doing this strategy even today.
Look at B&H, where both an a7mk2 and an a7mk3 and an a7mk4 is available for sale!
I see nothing at all wrong with Panasonic keeping around the Panasonic S5mk1 at a cheaper price. (currently US$1.4K https://www.bhphotovideo.com/c/product/1581612-REG/panasonic_lumix_dc_s5_mirrorless_digital.html)
Even better if they keep on bringing it down in price, brand new $1.2K S5mk1 by Christmas? Sub $1K S5mk1 in 2025?