I don't think the series S holds back development of series X. It's not like having to support last gen consoles in the sense that they had different hardware architecture.
The series S has the same architecture as in the series X, just at a lower performance target i.e. series x tends to to target 1440p+, but series s is 900-1080p. It supports all the features of its bigger brother, but targets a lower resolution.
That was the original idea but in reality it's proven to be a headache. There is no Baldur's Gate 3 for Xbox yet because the split-screen is tough to implement on Series S. A lot of Series S titles don't have ray tracing that is present on Series X, as another example.