Upside, it's a Porsche flat four rather than an "off-brand" swap. The 718 fours are also underrated—they may be "throbby," but they're four-cam PORSCHE flat fours (consider what people pay for those in 356s, 550s, 718s, 904s, etc). Now add four valves per cylinder, variable valve timing and lift, EFI, direct injection, and…oh…turbocharging and intercooling. And variable turbocharging in the case of the 2.5s…yet the 2.0 is plenty quick when mounted in a modern 718.
Otoh, I happen to be a fan of cool off-brand engine swaps. Also for the record, I seem to remember liking the 2005~ 2.5-liter STi engine for North America better in terms of character than the 718 engines—it felt smoother and sounded better. IIRC, it was nicer, smoother*, and sounded better and a lot more expensive than the 2.0-liter flat four in my 2003 WRX, too—bizarrely reminding me of a mini 996 Turbo engine rather than two-thirds of one. It also avoided the 2.0-liter's lack of low-down/off-boost grunt. Just a gem of an engine.
Good power, too. Can only imagine an STi engine in a lighter, mid-engined 914 vs an AWD sedan…let alone a tuned one

There's also a lot of support and motorsport development around the Subaru engine, and quite a few people have figured out getting it to work in the 914. I hear nothing but good things, and despite having done a six conversion sometimes think it might be the ultimate engine for a 914.
Well, besides a Ferrari V8.

*Also IIRC from the UK magazines in period, the "smoothness" of that generation of STi engines was hugely dependent on the exhaust layout, possibly on the way to the turbo? I guess some special editions altered that and got a lot less smooth and a lot more throbby. So I'd take a good long look at the exhaust used on the early US STi (2005, I think?), and wonder if that could be applied to a 718 engine in the process of bringing it into a 914 if it's just gotta be a Porsche engine. Would be worth it to me to get rid of the throb, but I always wonder what secret sauce is lost as one starts fiddling with Weissach's optimization, especially in recent years. Even with the potential gains to be had out of not needing to meet the same regulatory requirements the factory engineers did. They don't call 'em wizards for nothing…