In my previous position we built a lot of wearable devices so having a dev system at home was no problem since they're portable by definition. Likewise at my current position, we have larger, but still easily movable development/debug systems since the product I'm working on fits on a desktop. Takes up more room with everything splayed out on a back plate, but still fits on a tabletop.
But going back two jobs where the machines we built were large, very complex and floorstanding, it would be much more difficult.
It's also much easier when the hardware is stable. When you're still in the "bring up" phase, there's a lot of shipping hardware back and forth, or occasional office days together if feasible, especially if you need a $70,000 tool that the company doesn't want you taking home.
As the pandemic has progressed, embedded development has adapted. The biggest reason it's likely to reverse is simply that a lot of companies prefer to have their people onsite.
Yeah, I think a lot of engineering managers still think it's impractical. It worked out well for me on a few projects, but I got them from people I had previously worked with in person.
However, I'd be fine with any kind of work, it doesn't have to be firmware.
