I've written lots of graphics and image processing code.

You can see the logo because almost every computer system on the planet handles color spaces incorrectly. Apple's devices are actually better than most, though third party drivers such as those for printers can sabotage their color handling.

The canary image will appear as red without a logo on a computer with an sRGB display if that computer correctly handles color spaces throughout the whole imagine pipeline. That's a lot of ifs.

If your system ignores color spaces, you will see the logo because the Display P3 (DP3) color space gets compressed into sRGB. When you look at real world DP3 images on this system, you will see the reds as being more muted. The same thing happens if you use an Adobe RGB camera (there are lots of these) and display it in sRGB, except with the green channel, because AdobeRGB has a wider green range.

No matter which color space you use, an image will contain RGB tuples. The color space is additional meta-info which says how to interpret those tuples. Lots of software will ignore the metadata and simply assume the RGB tuples are used in the same way as it expects.

I think "incorrectly" is a strong assertion to make, when it's behaviour that most users are actually accustomed to and expect.

I guess you could think of it somewhat like the difference between clipping an image larger than the monitor's resolution or scaling it to fit. In the former case you preserve the accuracy of individual pixels within the area that fits, but discard the information outside; and in the latter, you lose accuracy of individual pixels but preserve being able to see (an approximation of) the whole image. Applying this to colour spaces, "clipping" DP3 to sRGB preserves the "absolute" colour information but discards the "relative" differences (hence not being able to see the logo), while scaling discards the absolute colour (I think this is what you mean by "reds as being more muted") but preserves the differences (being able to see the logo).

Since a user looking at a monitor derives most of his/her information from the contrast between pixel's colours, I'd say discarding that contrast is the real "incorrect" choice most of the time. DP3 images scaled onto an sRGB monitor certainly won't look as good as on a DP3 one, but at least the user will still be able to resolve the fine detail that relies on differences in pixel values. Besides, getting absolute color accuracy on a monitor has always been nearly impossible in a non-specialised context since it depends so much on things like external lighting.

So... correct me if I'm wrong, but this DP3 color space they're using isn't increasing the bit-ness of the color, it's still 8 bit color, they're just using a different color space to get a wider range of color with less precision?

Seems sort of silly to me as most designers will be on sRGB displays and most people will be used to how images look in the sRGB space, but I guess it's one more way for Apple to sell more new Apple stuff by pretending these extremes in color are more important than precision in other parts of the spectrum.

I can definitely understand going to 10-bit color, this, not so much.

They're not mutually exclusive. Right now basically every single display is 8bpp even if Apple went to 16bpp displays when using normal applications most people wouldn't see anything special because the source data is all still based on eight bits per pixel.

By improving the color gamut you can actually see a difference on the display. Areas where there were differences and color before but it was invisible because of the display now showing actual difference. It's slight, but it's there.

Seems like a good move to me. I imagine moving to 10 or 12 bit color will be the next step.