How does that pan out when the company discontinues that product model or product line?

It does not, but that is not the problem my suggestion would solve. The solution to this problem is to not buy these "advanced" devices

A family member got a fancy device with zero buttons on it, and an app that basically provides ‘+’ and ‘-’ buttons that has to go through that companies cloud service. When their internet went down, they had to unplug it because it was set wrong and without internet, it couldn’t be set.

This wasn’t some advanced capability. It didn’t require massive data or computational power. It literally could have been handled with a 7-segment LCD panel and three buttons (+/-/Power). If you buy that device now, they require you pay a monthly subscription for the privilege of being able to do that (under the excuse that they use ‘AI’ to know the right values without being told, but conveniently even the ‘+/-’ functionality is now locked to the subscription plan.

Wrong choice in my opinion. And also terrible design of the device itself. But as long as people will look more to the design than to its usability, companies will continue to do these kind of devices.
And I don't buy the "but all the companies do this and that, there are no alternatives": alternatives are present, people are just ignoring them to buy the last device sold with the lastest buzzwords.