This is called a WLCSP package and the size is dictated mostly by the number of pins. There have been some for ages with 16 pins (4x4 grid), but this one is half the size at 2x4 pins, so cool. You need pretty advanced PCB fab to use them. But yes, if you go on youtube or do a web search, you can find examples of people hand soldering this type of package.
This part has 16k of flash and 1k of ram, so comparable to the lower end TI MSP430 processors, and maybe midrange by 8-bit MCU standards. It might be comparable to the ATmega parts on the earlier Arduino boards. The later (ATMega328) Arduinos have 32K flash and 2.5K ram, which is still in the same general class.
heh, then YOU could run Linux
which reminds me of this sketch from LoadingReadyRun where Linux gets installed on everything, even a person: https://youtu.be/ajW2fDy41fY?t=229
I work with 32MHz microcontrollers at work and you can do plenty with them. It's a different world from say general CPUs where speed is king. You're often more concerned about timing reproducibility than outright clock rates. There are also considerations about power consumption, electrical noise, functioning in extreme environments, etc. that may inform your decision to go with one controller over another.
It's going to be about equivalent to the ATMEGA328P you get on a garden variety Arduino can do, albeit with a lot less IO. You're probably looking at the speed controller in a power tool or the onboard computer of a Qi charger or something. In a lot of cases, you just need something that can run a few lines of C.
The original DOOM ran on a 80386 which was actually slower than or roughly equivalent to this controller. Recommended system specs were for a 486 though which was maybe 2-3x as fast.