My gear:
beloved iMac 5k (late 2020)
M3 Max Macbook Pro
Belkin Thunderbolt Cable
Luna Display
tldr: if you want to do a pseudo target display mode with a modern iMac. This is the way.
I love my iMac 5k 2020 for its Mac power and its boot camp’d Windows power but my Macbook Pro has become my preferred Xcode machine. I did not want to toss the iMac and get a Dell or Samsung monitor for the Macbook Pro so I floated the idea of using Screens from Edovia to make a fake “target diplay mode” on the iMac. @cornchip suggested Luna Diplay. I took a quick look at the web page and decided to try it. It took about a week to arrive. I connected the two macs with a thunderbolt 3 cable, and lets just say “Wow”. Any lag is barely noticeable (mostly when I use the arrow keys or backspace). I am typing this post on the iMac powered by M3 Max Macbook Pro and I would rate it 9/10 for response and fluidity. Xcode feels great. They warn us about games and video, but normal graphics use seems fine. I am getting Retina, so I fired up Campaign Cartographer 3+ and messed around with some map creations, works and looks great. Photoshop looks great for non-professional needs. Everything was done with my macbook pro lid closed sitting on the desk out of the way.
Bottom line: I cannot find any faults. This is a quality little piece of hardware and it has probably saved the life of my iMac.