32GB could be useful if the bandwidth is fast enough to be suitable VRAM, because then you can run games that want 16GB allocated to the CPU without having a GPU performance drop
I've seen comparisons of the 32GB vs 16GB GPD Win4 and there's about a 10-15% uplift in performance at the same TDP in a lot of games with the 32GB model.
So it can give an increase in performance, or at the least let you run at a slightly lower TDP for the same performance and a bit better battery life.
Of course this was the 6800U, hard to say if the effects are similar for Intel's chipset or not.
Sometimes I run out of RAM on my steam deck. But that's more of a game problem. It happens when I don't restart Forza 5 for a long time. 16GB wouldn't be a problem if it had dedicated VRAM.