Is this going to be a thing game changer and a shot across the bows of Sony/Nikon/Canon/Fuji et al?
I don't think that's the objective.
Based on what the Adobe developers are saying, it's an attempt—an experiment, at the moment—to see if it's possible to discover computational processing techniques that avoid some of the questionable color, tonal, noise reduction, and sharpening results that photographers accustomed to using dedicated cameras find objectionable in cellphone snaps. Some of which, as the Adobe blog acknowledges, probably were introduced in an attempt to please the larger audience for cellphone images.
The DNG's emitted by the (iPhone-only) public release of the Project Indigo app are "rawer" than Apple's ProRAW DNG's* although they also are computationally pre-processed to some extent, and in my initial and admittedly limited testing on an iPhone 16 Pro, those shot in low light appeared somewhat more natural and were more flexible to modify in Lightroom than the ones emitted by Apple's own Camera app. In daylight or well-illuminated indoor settings, the differences were less significant. Any serious testing regime will need to probe for the real edge cases, of course, where I suspect the Project Indigo files may have a greater advantage.
But the Adobe developers' goal seems to be to create computational techniques that ameliorate more of the deficiencies of tiny cellphone sensors than other current imaging software—not to supplant dedicated cameras with larger sensors that have inherent hardware advantages based on the physics of capturing light.
I don't think Sony, Nikon, Canon, and Fuji, et. al., have anything to worry about. But at the very least, I expect the Adobe project to challenge other cellphone camera app developers to reconsider their own processing approach.
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* . . . the DNG output by our app preserves the main benefits of raw imagery, which are that its pixels are proportional to scene brightness, i.e. they have not been tone mapped, and they have a greater dynamic range than the pixels in JPEGs, e.g. 16 bits for each of red, green, and blue, instead of 8. These differences provide more latitude during editing.
Second . . . our DNG provides a benefit that most raw images do not - the aligning and merging of multiple frames. This gives them high dynamic range and low noise. They are also stored before demosaicking, i.e. 1 color per pixel instead of 3, so they are smaller than Apple's ProRAW files with no loss in quality.
