so, prior to USB4, a USB-C port could be a USB-C port, transmitting USB protocol. or it could change into a DisplayPort port, or a Thunderbolt port (transmitting PCIe), or whatever alt mode.
USB4 seems confusing at first. A port can be any of those, plus a USB4 port, which can handle USB 3.2, displayport and thunderbolt. usb4 is based on thunderbolt 3. what the hell is thunderbolt 4 then? they do the same thing? what the fuck?
here's the trick: USB4 is a network protocol. The port is fully backwards compatible, and can turn itself into a USB 3.2 port, or a port using an Alternate Mode, just like before. But when you have multiple different kinds of USB4 devices plugged together, USB4 can handle all those things at once. It sends USB 3.2 as packets, or Displayport as packets, or Thunderbolt/PCIe as packets (as long as the device manufacturer built PCIe tunneling into the device); the only limitation on the things you can send over one cable simultaneously is bandwidth. And it has a lot of bandwidth.
No more weird restrictions based on how many lanes/wires the Alternate Mode physically assigns to what purposes, (almost) no more having to memorize which ports on which device have which capabilities, or memorize what the hell USB 3.2 Gen 2x2 means and how much bandwidth a given cable supports. A fully USB4 setup should just work, with many fewer caveats to that than existed previously, and it will make use of the maximum 40Gbps capabilities of a high-spec cable. You can plug an EGPU and a Displayport monitor and a USB 3.0 device and a USB 2.0 device into a USB4 hub (all USB4 hubs are required to support all USB4 capabilities, to prevent problems) and it will automatically route whatever to wherever.
Thunderbolt 4, in the meantime, is a certification program. Anything that has Thunderbolt 4 ports is guaranteed to support the highest possible specifications. You might not be able to plug an EGPU into your USB4 phone, but you can probably plug it into a laptop that says it's got USB4 unless it was cheap as hell, and definitely plug it into a laptop that says it's got Thunderbolt 4. And barring some specialty things (eGPU docks), anything that says USB4 plugged into a device with fewer capabilities will drop down to whatever capabilities the attached device supports.