Apple pencil hover
While I understand apple pencil hover isn’t available on 2022 iPad air, is it due to hardware or software limitations?
iPad Air (5th generation)
Apple has not indicated whether or not the new Hover functions are limited by hardware, or intentionally restricted by software implementation.
That said, in considering this for yourself, you might note that Hover Accessibility functions are at least available for iPad Pro models that do not have the full set of hover functions - as illustrated here:
Settings > Accessibility > Hover Text
As Accessibility Hover settings are available for at least some models of iPad - where full Hover functionality is not available - a reasonable supposition might be that Hover may merely be restricted for reasons of marketing and not hardware limitation…