One advantage is there is more raspberry pi specific support in the newer upstream kernels which reduces the number of downstream raspberry pi patches and so reduces maintenance effort.
5.4 also includes the kms driver for Pi4 (this means driver code for display, like the hardware video scaler and HDMI runs on the arm rather than closed source firmware), and support for HEVC video decode using V4L2 on Pi4.
The kms driver also includes a new arm side hdmi alsa driver. See this post to enable.
Obviously a newer kernel will bring additional kernel features and support for more devices (e.g. USB devices like wifi and dvb).
You can read up on what appeared in 4.20, 5.0 ,5.1, 5.2, 5.3 and 5.4.
We will do this in a few stages. Starting now, we are updating the "next" firmware branch to the 5.4 kernel.
Assuming testing is positive, we'll update the master rpi-update firmware branch.
Eventually the 5.4 kernel will appear with "apt upgrade" and on new raspbian images in the future.
The 5.4 kernel is an LTS kernel (long term support) and has been used in LibreELEC nightly builds for a while.
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Please report if there are any regressions compared to the 4.19 kernel.
If you are feeling especially bold, you can try the kms driver. Rather than dtoverlay=vc4-fkms-v3d, switch to dtoverlay=vc4-kms-v3d-pi4 on a pi4, or dtoverlay=vc4-kms-v3d on Pi2/3 (not recommended on Pi0/1).
Note: kms won’t ever support applications that use firmware apis for display like dispmanx, or mmal/openmax video_render, including omxplayer, raspivid and non-gbm kodi. Similarly tvservice is not useful in this environment.
Obviously this release is for testers who like to live on the bleeding edge. It's not intended for beginners, or users who need stability.
Backing up is always advisable. There may be regressions. There may be improvements. But we won't know without testers trying it and reporting back.
Note: the next firmware branch also includes common firmware which is also being tested.
EDIT: 5.4 kernel is now on master branch, as is common firmware.
EDIT: 5.4 kernel is now available from apt, as is common firmware.