Steam Deck 256 GB LCD - Valve Certified Refurbished is available for $319
Even the worst pricing of a low capacity 2x8 GB DDR5 SODIMM kit shouldn't push up the BOM cost much more than $150.
Like an initial profitable $600 price point driven up to $750, not $1,000.
Separately, there is the SSD to consider, although I doubt the entry-level 512 GB SSDs are going to be hard for them to source, and they may be able to use the same supply they bought for Steam Decks.
Note that they've recently cancelled the 512 GB Steam Deck LCD model.
They are basically using an overclocked
RX 7600M, probably coming out of a warehouse of unsellable RDNA3 mobile GPUs (notice how there has been no RDNA4 mobile GPUs). Hopefully those come paired with all the GDDR6 needed to be functional, not sure if that's how it works though.