Thing is, while some of RNDA2's R&D was paid for by MS and Sony, that's not the case for RNDA3 and besides if a new generation costs tens, or hundreds of millions to design and tape out then selling low quantities just because the CPU division can sell the wafers for more... Well why bother being in the GPU business then?AMD still makes most of their money from selling CPUs. Logically, it's probably better to focus most of their investment there.
It's not really in their interests to out produce each other, unless they can scale the production at low cost. They seem to have 'just enough' capacity at the moment. I would guess that scaling up chip production is always a big risk, financially.
The margin obsession ignores the huge fixed costs of designing a new generation of GPUs; they really need volume. Plus, their margins aren't Apple crazy so surving on under 20% of the market is very dangerous even if developers can't totally ignore them due to the consoles.