I was just typing out my reply, but yours is much more detailed anyway, @OP this is the correct solution.

I'm in no position to discourage you from building this, but this is a fsr greater project than you're writing it to be. Send me a link to the git repo, so I can tag along and keep updated!

Thanks for the detailed answer, that helps a lot for my understanding.

The project sounds like a lot of work, especially for such a niche application. Do you have a crowd to support this (with time or money) or do you plan pay for this and sell it in the end?

It somehow feels like you put a lot of thought into this already and missed starting from the beginning in this post.

What device do you want to have a USB-C DAC for? What's the actual size limitations and what power do you want to draw that would need a heatsink? Do you have specs in mind, or is there a comparable project already available to look at?

Totally true.

This cable tester is made to help with the issue of bad kr wrongly labelled cables: https://caberqu.com/content/8-ble-caberqu

Sure thing, if that's allowed: 8volt.at

We're doing custom builds for research as well as exhibitions and develop new machines and parts for industry ;)

I did that for almost 15 years, now I'm running a company developing embedded electronics using them daily.