A discussion thread was created here because EIPs now require EIP discussions to occur on Fellowship of Ethereum Magicians and EIP pull requests no longer work without a discussion link that points here.
But from my point of view, ERC725 is just a generic executor and a generic data-key value store that can be used in different forms of vaults, wallets, and accounts that could be AA compatible (4337).
ERC725 by itself is not an account that can compete with 4337 because an account needs much more functionalities than just executing and storing data, (Signature related, token callbacks, etc …).
For example, LSP0-ERC725Account uses ERC725 and other different components (ERC1271, LSP1, LSP14, LSP17) that form a blockchain based-account that can support 4337.
On the other side, LSP7-DigitalAsset and LSP8-IdentifiableDigitalAsset, uses ERC725Y to store unlimited meta-data for the token contract and different tokenIds.
So, ERC725 is not restricted to being used or competing with accounts, it can be useful in different types of smart contracts.
Like Yamen wrote ERC725 X and Y is not a account standard, but could be used as such, as we do in LSP0-ERC725Account. LSP6-KeyManager is more comparable to ERC 4337, but it doesnt require any protocol changes. ERC 4337 can also be used in conjunction with LSP6 and LSP0 to make the account abstraction memory pool based, rather the pure transaction relay services. But this would require adding a function into LSP6 to support that (which is fairly easy todo)