I am not confident that target display mode will work, since on the previous 5K iMacs it was found out that the screen needed two streams of DP signals, being fed directly from the GPU via internal non-standard circuitry in a duplex manner for the full 5K 60Hz to be realized. Even with Thunderbolt 3, the MBP connecting to the LG Ultrafine 5K used similar tricks, but this time over a singular TB cable, since the intel TB3 specs only use DP 1.2 where a single DP connection does not have enough bandwidth for full 5K 60Hz. LG and Apple was probably on some hardware tricks to allow 2 streams of DP going through that one TB3 cable, treating them as data than DP streams.



If Apple were to allow the same to happen with the new iMac, specially to allow duplex DP1.2 to enter the motherboard to be fed to the panel(s), it actually should take substantial amount of engineering in circuitry and probably something more on firmware / OS level for that to happen.



Therefore, my guess is that if Target Display Mode is enabled, it won't be full 5K 60Hz, in which case Apple is likely to just not allow TDM at all.