They already have that market covered. It is called EOS-M. Why would they make another one in a different mount?
I don't see why there's an issue with this? Canon can clearly support 2 systems, and I don't think an APS-C R camera would totally cannibalize the EOS-M line. I think both could coexist just fine.
EOS M is a small form factor, and Canon clearly has size restrictions for EF-M lenses that make it difficult for certain types of lenses. EOS-M is there for the people who think mirrorless should be about size. There are a lot of people for whom this is important. They'll buy into the M system. Canon wants to make money off these people, so they will keep selling EOS M.
The ergonomics of the EOS R aren't perfect, but I still think they're MUCH closer to what I want. I don't care about size/form factor/lens size. The things I want from mirrorless are ONLY exposure preview and better AF spread. Otherwise I'm happy with DSLR. There are a lot of other people like me (despite what many people say!), including a certain group of entry-level/enthusiast buyers. It's part of why Rebels still sell when people could be buying PowerShots or even whatever m43 camera you might want to consider. If nothing else, certain people see the DSLR-type form factor as "Pro" and they want to be a "Pro." Some people will want larger cameras than EOS M, for whatever reason.
Even though most people who buy Rebels will never upgrade to FF, there's the sense that you *could* do that if you wanted. It encouraged people to buy into a system, and in some cases to buy more expensive lenses than they ever need. You buy a Rebel and a EF 70-200 because some day you REALLY WILL buy that 6D mark II to get full use of the lens (even if you really won't). Canon just made WAY more money off you than if the EF-S 55-250 had been your only choice.
Canon wants to sell RF lenses. They will be more expensive than EF-M lenses. Canon can't sell RF lenses to people who buy the M50. There are people who will never pay $2300 for a camera. They might pay $1500. They probably would pay $999, just to show off their Pro Camera (TM) to their friends. Canon wants to make money off of *these* people. That's why I believe APS-C R is inevitable. Why does Canon sell a 77D and an 80D when the 6D mark II is clearly "better"?
The other reason is the 7D line. Canon still clearly has some issues with FF sensor readout. I'm sure they will one day be solved, but I don't think that's imminent. I think there's likely to be at least one more APS-C high-fps camera. There are also wildlife folks that enjoy the extra 1.6x reach that they get. I think there's demand for a high-end APS-C R camera, at least in the short term.
Why does Prego make 50 kinds of pasta sauce? Shouldn't they just make the 2 or 3 best ones? Because nobody can agree on which the best ones are, and they can get more customers by selling all things to all people. Canon has had pretty much the same approach to DSLRs (SL2, Rebel 7, Rebel 7 Ti, 77D, 80D, 6D, 7D, 5D, 1dX). Why people think they are suddenly going to cut out the middle half of their market as they move to mirrorless, I don't understand.