The DDR5 part is possibly the least believable thing about it considering AMD won't be adopting it into any other processing lines until Zen 4, though it is possible AMD will use Rembrandt as a sort of beta test so it will go much more smoothly than it did for them with DDR4.
The only thing I don't think is right is the lack of onboard VRAM. AMD may be banking on DDR5's bandwidth and 4 memory channels to feed the GPU, as system RAM has always been a big hinderance to APU performance, especially in the budget space, but with Intel putting HBM into their Sapphire Rapids server chips, integrating HBM2 in these APUs would at least give AMD some experience, and should reduce final costs as DDR5 will be expensive, at least through the end of this year due to the chip shortage, especially for 4 modules.
The only thing I don't think is right is the lack of onboard VRAM. AMD may be banking on DDR5's bandwidth and 4 memory channels to feed the GPU, as system RAM has always been a big hinderance to APU performance, especially in the budget space
The Ryzen 5700G's APU's memory performance scaling flattens out at 3200-16, which is practically baseline DDR4 at this point so I wouldn't consider memory as a major bottleneck for current IGPs. The biggest problem with IGPs is how much silicon and related costs you want to throw at it when the bulk of your customers either 1) don't necessarily need more IGP performance or 2) will use discrete graphics anyway. For both of those scenarios, it makes sense to scale the IGP only as far as spare bandwidth using contemporary memory will allow and not bother with the added cost overheads of on-package memory.
AMD putting any sort of on-package memory would likely require a couple of additional voltage rails to be accounted for on the socket pinout to avoid needing an on-package memory VRM when space is already awfully tight.
The main problem with DDR5 availability and street prices right now is support components supply. The leaked Rembrandt parts are BGAs, which means they will only be available through OEMs who aren't going to pay grossly inflated street prices for DDR5 (SO-)DIMMs. OEMs can also just buy the DDR5 chips, solder them directly to the motherboard and borrow a phase or two from the CPU's VRM to power DDR5 instead of sourcing elusive DDR5-specific VRM components like they are already doing with DDR4.