Flatpak uses OSTree, like Fedora Atomic Desktops (Silverblue, Kinoite etc) and similar to BTRFS snapshots.
So many files are deduplicated and linked, not actually there
https://gitlab.com/TheEvilSkeleton/flatpak-dedup-checker
50GB without
31GB with deduplication
21,4GB with BTRFS compression
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I always use the app image if they are available. As for being slow I never noticed.
No app desktop entry is one on the reasons I like them. If its one I use a lot I make a hotkey to open it. But there are ways to add them. There is even a tool that makes its easy to do.
No updates. I'm not sure how exactly, but everyone I use auto updates when I open them. I originally had a issue of it breaking my hotkey cause the file name would change because of the version number going up. Which I fixed by using a *.
The appimages I used dont autoupdate. But even if, you are in some weird "windows is bad" state from years ago, before the MS Store, and even without desktop entries.
There simply is no reason for appimages other than on systems like Tails that are not made to install apps. But I also think Tails is pretty annoying and should allow flatpak installs in the permanent storage partition.