As long as you connect the LAN port (PoE, Duh!), and any wireless devices you have can connect via separate WLAN APs - AOK.
Matter usually uses Ethernet (e.g. WLAN); most Thread Border Routers connect WLAN<=>Thread (e.g. Nest Hub Max, some Alexa (ISTR), some Apple hubs, etc).
I’d probably do the same with a CM5 if they were available. The only reason to go for eMMC + WLAN is to make a future re-use of the CM4 more flexible as the cost difference is buttons.
My CM4 Yellow works OK with 2Mb, but complex ESPhome projects can fail (set single threaded) - I’d probably go for 4GB+.
HAOS was recently changed to install both OS + HA onto the NVMe and ignore the eMMC - the rational is to make upgrading from a CM4 to a CM5 easier (just move the NVMe over…).
A CM4 is easier to install as apparently the CM5 won’t boot from USB directly - not tried yet.
My Yellow has the original install so the OS is on the eMMC, and did the “Move Data Disk” thing to get data on the NVMe.
If this helps, 
this post!