I switched to Gentoo and it fixed all the issues I was encountering with Arch, and was more stable. Now I'm on NixOS, which is far more stable than Arch or Gentoo were.
Now, that said, the way SteamOS uses it, I don't see any issues. With an immutable system, A/B updates, and tested images, the compatibility and update issues are solved. Using flatpak for user applications solves the rest of the noted issues. Would be ideal if I could install with Nix instead of Flatpak, but ran into some trouble there.