Since returning as show runner of Doctor Who, RTD has stated fairly confidently that he was going to make sure the show delivered one season per year going forward. That made the reduced episode count a bit easier to swallow... a tiny bit...
In the meantime, though, streaming companies have become more cautious splurging money on show commissions, and it seems that includes distributing deals like the Disney+ one that boosted Doctor Who budgets for the most recent season, as well the forthcoming, already filmed season.
Quoted from an interview with SFX magazine, RTD now says that we won't have a definitive answer about a third Ncuti Gatwa outing until season 2 has finished airing:
It’s an industry decision, it's like any business – these things take time. I think the decision will come after the transmission of season two. That's what we're expecting, that's what we've always been heading towards.
Given the time it seems to take only producing 8 episodes and a special these days, that will likely mean at least an extra one year gap between seasons 2 and 3 airing, if the show is even renewed by all current production and distribution parties.
Maybe, just maybe the spin-off The war between the land and the sea can fill in such a gap, but only time will tell.
Agreed about the mid-season highlights!
Not to harp on about the shorter seasons, but I do think it stunted the capacity for a satisfying arc or throughline. There is a threat being introduced in "Devil's chord", and some cameos throughout the episodes, but... it doesn't quite have the effect it would if it had had just another couple of episodes to mature.