Phosh is not based on gnome-shell and has its own settings and apps, but it does use parts of gnome, no reason to reinvent the wheel.

> Seems like a very strange bundle to bring in for an extremely power constrained device, where every % of increased battery drain is noticed by the user

I'm sure you can make your Frankenstein version that would be 10% as usable and secure as phosh by removing everything but for most users, 100mb more ram and 1% more battery drain for an OS aiming to be a daily driver is something that's worth it.