The issue with that analogy is those two platforms differed so vastly on a fundamental level that even without considering the difference in performance, such an undertaking would have been Herculean. The original PS3 had to include PS2 hardware to support backwards compatibility, before they just gave up on BC altogether. The PS5 on the other hand doesn't even need an emulation layer to run PS4 games; the vast majority just run, as the two platforms are binary compatible.
Forza Horizon 5, for example, is considered a showcase of Xbox Series X capabilities, yet by all accounts still offers a respectable Xbox One experience. There is no reason to assume GT7's PS4 release is going to mire the PS5 version with hideous compromises. Perhaps one might be concerned that Polyphony aren't a developer that could pull off that scalability, but if that were the case, I wouldn't consider them to be the kind of studio that could get the best out of the PS5 in the first place.