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I see two separate discussions here: (1) whether full-frame (FF) is actually 'better' than cropped sensors (APS-C) and (2) whether Fujifilm should enter the FF market. (1) in terms of image quality, bigger sensors have an advantage over smaller sensors. It's basic physics (and electronics). It depends however on comparing sensors of similar generations. A 10y old design is most likely less in terms of IQ than a recent design. You need to compare apples with apples... Whether or not the difference in IQ is visible, is a totally different matter. That depends on quality of the rest of the camera, quality of lenses, quality and size of the viewing screen or prints, ability of the photographer... et cetera. Whether the difference in IQ matters is an even more personal question. That is a matter of budget, weight and size you're willing to carry, personal preference for a camera brand or the purpose of use... A landscape stills camera has different requirements than a fast action sports hybrid camera... So, technically a bigger sensor generally has better IQ than a smaller sensor, but there are many more factors that determine the 'best camera for you'. (2) Fujifilm is a fairly large corporate, but the camera division in itself isn't particularly large. It's smaller than e.g. Nikon's and Panasonic's imaging divisions and more than 5x smaller than Sony's imaging division. Moreover, back in the late 2000's, the camera division of Fujifilm was on the brink of being closed. The X-system was the 'last attempt' to address the photographers market and they succeeded. In itself that was a great success, because the market for digital cameras (compact + interchangeable lens cameras) shrunk with more than 90% between 2010 and 2020. Their bet to stay close to affordable, but good quality ILCs paid off. They found a niche market and by focusing on that market (compact APS-C cameras, a decent lens line, retro styling and film simulations) they became the dominant player next to Sony. By 2015 Fujifilm made the decision to launch a digital cropped medium format. That wasn't strange, since in the days of film Fujifilm medium format cameras had a good reputation for being rugged and affordable whereas in the 35mm camera market Fujica was a 'B-brand' at best. Again, MF is a niche market in which they could become a dominant player. Also note that Fujifilm doesn't manufacture it's own sensors. They buy from Sony. That means that they will always be a little behind in terms of the latest generation of sensors. Usually 6-9 months. Now, when entering the FF market it's like you enter the shark pool. It takes a lot of money and other resources to succeed and even then be only #3 or #4 in the market. Imagine: you not only have to design and produce a range of cameras, but also the accompanying lenses. None of the X-mount lenses will cover a FF-sensor. All of the GF-mount lenses are too big and slow for FF (but great for MF). Next to that, when you want a professional FF-system, you have to set-up a world-wide Professional Support Service that operates 24/7 and is present at all large events (Olympics, World Cups, UN, EU, WEF, G7 and G20 events... you name it). That is very different from their current basic FPS for a handful of MF fashion photographers... ;-). So, I guess that Fujifilm gladly forfeits the FF-market and focuses on markets where they can be a dominant player. Given their size and the shrinking of the market, I think that is a smart strategy.

The RP is "full frame" like all those '90s era stereo receivers that were "digital ready." Its made of plastic, not WR, its DR is poor, AF nothing special; its sensor tech is generations behind even for Canon. It lacks IBIS, in addition to anything like the full scan 4K of the X-T4. A more apt comparison would be to the R6, which is a pretty compelling camera-except for the part where it's most of a grand more than a T4. And then there's RF glass which, while optically stellar, makes Fuji lenses seem downright thrifty in price. Fuji makes really great APS-C cameras, and really great medium format cameras. Lots of companies make really great full frame cameras, so I think Fuji is in the right to go the way they are.