If a hacker gains physical access to these devices, they could extract the firmware and obtain sensitive data by analyzing the binary code

If someone breaks in and gets physical access to a light bulb, they also have physical access to all kinds of other electronics. The attacker can install their own surveillance hardware or steal whole computers and storage devices.

As far as i deduct from the article this is specifically about devices that directly link to your wifi.

Most modern iot devices use a mesh network with an internet connected hub presumably those are way less at risk?