I agree. Of course no one on this forum really has any idea but I find the argument that the M system has to have only small, compact cameras not very convincing. Canon has a decision to make.
It seems to me they already made that decision about the EOS M system several years ago. It also seems to me they are unlikely to change their mind in the way you seem convinced they are going to, all "no one knows except Canon" disclaimers notwithstanding.
Personally, I think an R system APS-C body is among the least likely options. It hinges on the idea that Canon is convinced that people buying into the M system only want small cameras and that none of the perceived reach advantages to crop sensor bodies has any appeal at all to M buyers.
No, it hinges on the idea that Canon has decided to design and market the EOS M system to a specific type of buyer that doesn't care about those things like extra reach with telephoto lenses or features that require larger, heavier, more expensive bodies. Canon isn't really concerned if a few others who do care about those things buy EOS M products, but they're not going to change the entire philosophy of the EOS M system to go after those kinds of potential buyers who are much more limited in numbers than their targeted audience for the EOS M system. They've already created the EOS R system to go after those other types of buyers.
It also assumes that releasing new longer telephoto zooms for the M system presents some sort of insurmountable obstacle that Canon cannot overcome. I find that a bit absurd, especially since Canon does not seem to mind releasing lenses that have a fairly small market appeal. I also wonder just how much more expensive it would be for Canon to take something like the new 500mm zoom and redesign it for the M mount.
No one is suggesting Canon can't make larger, heavier, more expensive cameras or lenses in the EF-M mount. Certainly no one is saying they can't do those things for technological reasons.
The question isn't whether it is technically possible for Canon to do such things.
The question is whether Canon thinks they can maximize profitability by doing such things or by not doing such things.
In addition, I don't know where they price such a body. If it has all the features of the R5 (which 7D users would expect) is Canon going to price it anywhere near the 7DII price point? Probably not. An M7 that sits at the top of the M lineup has no price ceiling except what the market will pay. Since it is a different mount and the flagship, Canon has more flexibility in where they choose to price it.
Again, for the umpteenth time: How was the 7D Mark II (2014) priced with all that it offered that was far superior to everything except sensor size that the 6D (2012) and 6D Mark II (2017) offered? How did the 7D Mark II (2014) compare to the 5D Mark II (2012) and 5D Mark IV (2016) that sold for roughly twice its price?
I find it very plausible that Canon might prefer to keep a clear differentiation between their APS-C and full frame mount mirrorless lineups, so that buyers know that any lens they buy in the M mount is designed for APS-C and any lens they buy for the R mount is designed for full frame.
And I find it more plausible that Canon is more concerned with developing products that appeal to different types of buyers for each system that they are concerned with what size sensor each camera in each system has.
Obviously no one except Canon knows for sure, but I agree with you that a third crop system seems unlikely.
Of course no one except Canon knows what their plans for the future are today, but even they may not know for sure what might happen in the future.
Yet you keep arguing that only one option could possibly make sense to the decision makers at Canon because you have decided it is the only option that makes sense to you.