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e.g. using hypothetical numbers: if base MacOS/typical GPU usage requires 4 GB, then the 8GB model would have 4GB available for running apps (but multiplied by memory compression/swap to fast SSD). Whereas the 16GB would have a much more comfortable 12 GB for multi-tasking in that scenario especially with the multiplier effect of compression/fast swap on top.
So it still feels like a bit of an apples to oranges comparison as far as what an 8 GB model could handle in real usage. I have a friend who does light dev work on an M1 Macbook Air so I don't think an average user would have issues on the Neo day to day, but using the 16 GB as a yardstick doesn't seem that useful.