They are not mutually exclusive.
Ideally, for high quality streams we need L1 support.
We also need hardware acceleration (because software is too slow).
Our agreement permits us to do both, but there are other restrictions and changes that are limiting. The CDM update was another bump in the road. Also keep in mind that we have an agreement with Google, but not Netflix. So things will generally work - but won’t be officially supported.
So realistically we could do L3 but with HW acceleration on 4K/4K+ (which means 1080p would play smoothly and not be limited to 720p) and L1 on provisioned devices in future (which means providers would be more likely to provide us with those higher resolution streams).