The lenses where PDAF gives a performance advantage are all larger and handle poorly on an ungripped E-M5.3, as PDAF really only benefits C-AF use and that generally means telephoto's and/or faster lenses suitable for action shooting. And the gripped E-M5.3 is frankly marginally larger than an E-M1.2. When running ungripped, the E-M5.3 doesn't take advantage of most of its advantages over the E-M10's as sealing isn't available on compact lenses (barring the 12-45) and it lost the bigger battery and better EVF of the E-M5.2 and even gripped it no longer has vertical grip support so no dual battery option.
The problem with the E-M5.3 is that it's way more expensive than an E-M10.4 with few advantages when used off a tripod or ungripped, and much less camera than a E-M1.2 when on a tripod or gripped. It's a good camera on its own, but it loses out on most comparisons to the models next to it.
It would be different if it had come in at the $999 price point, it is a better body than the E-M10.4 all-around, but not as much so as the E-M5.2 was to the E-M10.2 or E-M10.3. But it's expensive enough that it's cheaper to get a used E-M1.2 (and in fact you can probably get an E-M1.2 and a E-M10.2 used for the cost of an E-M5.3 + grip new).
As a result, it doesn't look like the E-M5.3 is moving much of all.
I still don't understand how PDAF doesn't work well with all the lenses. Lens resolution affects its performance, but I haven't heard that cheaper lenses are bad with it. Why can't one use C-AF with people shots for example without much action? Or with wide to normal angle lenses, especially if shooting wide open?
I agree with some of your points, but not nearly all. Can't bother to start arguing about it for long.
I would have never bought E-M10 IV (I bought new E-M10 II for cheap), and I think there is much more between E-M10 IV & E-M5 III than you give credit for.
E-M1 II vs E-M5 III is not a big problem imo. A new E-M1 II has been always more expensive, and many people value smaller size more like I said. I'm pretty sure I will never buy E-M1 sized camera, but won't promise.