what does the community think of it?
Everyone has their own opinion, personally I think they're a great idea and have lots of great applications. But just like rolling vs non-rolling release it's a personal and application dependant choice.
Do the downsides outweigh the benefits or vice versa?
Again, depends, for my personal computer I wouldn't use it because I think it could get complicated to get specific things to work, but for closed hardware like the Deck or even a fairly stable desktop used as a gaming system it's perfect.
Could this help Linux reach more mainstream audiences?
It could, it can also hamper it because people might start to try solutions that only work until next boot and not understanding why, or having problems getting some special hardware to work (more than it would be a mutable distro). But there is a great counter to this which is that once it's running it will be very difficult to break by user error.
At the end of the day I think it's a cool technology but that people should know what they're getting into, just like when choosing rolling vs non-rolling distro, it's not about what's better, but what suits your needs best.