They're making it vaguely similar to the Republics of CK2 - you get a family estate instead of land, and have to jockey for positions of power within the bureaucracy. IMO the whole system is definitely leading to playable republics again, hopefully in 2025.
Meh. I would prefer creating a new title tier below Baronies: Estates.
Estates would essentially work like Baronies did in CKII in that they wouldn't be represented on the map like Baronies are in CKIII. It wouldn't be practical anyway since Estates would represent plots of land too small to practically subdivide Baronies, like Baronies have been done to Counties in CKIII.
In Feudal, Imperial, and Clan (i.e. settled realms, dunno how Tribals would work so I'll ignore them) realms Estates would be split off into Owned by Nobility, Owned by Freeholders, Owned by the Crown, and Empty. This would actually allow for a pretty accurate representation of the ERE in game, where the power of the landed Magnates was based on their Estates, not necessarily their control over a given Theme. This would mean, you could lose every title from Counties on up and, while it would be a significant blow to your power, it would not necessarily be a crippling blow (and it certainly wouldn't be a game over). It would also represent the true source of the Empire's military power: The Freeholder. It was generally easier to tax and recruit into the military small freeholder families. But of course, the Landed Magnates would also represent a source of talented military commanders (and usurpers).
There would also be a LOT of Estates on the map, likely tens of thousands (if not more) of them.