A downside of using PAM4 modulation: poorer eyes, lower s/n ratio and higher error rates means need higher power lasers, advanced error correction, and active cooling to meet specifications in Rockley's product. All around more complicated, expensive and an energy hog to boot. The upside is you only need half the connections, so when doing the math you should still come out ahead. Seems to me, packing more complexity, power and heat into similar footprint may have its downsides in the long run...
though not about PAM4 itself, the OFC "Rump Session" this week will cover some of this.