It can be both, right? Let’s say the vision system fails due to overheating, short circuits, or moisture ingress. All things which are known to have happened. Can the car achieve a minimal risk condition in that state? If the car is a Tesla, the answer is no, it can’t. Which means regardless of how good the software is/becomes, current Teslas can’t be L4 by definition due to hardware limitations. And you can go down the list. Besides vision, there are a number of other hardware-related single points of failure which would prevent the car from achieving an MRC.
This isn’t a particular problem because FSD is L2. It is assumed a human will take control of the vehicle in case of component failure, so camera-only is fine for the consumer market. But if your investing case depends on Tesla releasing a software update and instantly making millions of cars robotaxi-capable then it is a problem. I don’t see any scenario where regulators will sign off on a robotaxi unless the hardware meets SAE/ISO L4 standards, and current Teslas don’t.