>> In theory 2 can be done today, either by iwd or combo iwd/hostapd with > some >> manual magic. We do exactly this on our devices, when we explored things a while back it was not really an option to do it all with iwd, so we use iwd for the client part, create a new interface on the same WiFi adapter and fire up a hostapd + dnsmasq combo on it as a "configuration AP", if the device is not configured yet. The advantage is that iwd works in parallel in client mode so we can get the list of available networks and test that the configuration provided by the user really works without having to disconnect the user from the "configuration AP" until configuration is complete.

Creating a second interface in AP mode works on all the WiFi adapters we have encountered, which are mainly Intel and Qualcomm.