This seems to convert the entire aspect to a PATCH. For now, can we just patch the custom properties, to limit surface area?

I don't think it would work as expected if we emit rest of aspect as a whole and only custom properties as patch. Emitting the whole aspect will overwrite any parallel edits made to datasetProperties.

Is there any plan or intention to make this generic to other entities beyond Dataset?

Current implementation is specific for DatasetProperties aspect, however the namings (ingremental_properties_helper.py, IncrementalPropertiesConfigMixin, ...) suggest this could apply for the properties of any entity (Container, ...).

That's a very good question and I did consider it myself.
I was hoping, we can reuse this for rest of entity types as well in future.

If keeping generic is the plan, we may provide a generic flag description too, by mentioning entities instead of dataset.

Also, we may add some conditional logic when fetching the DatasetPropertiesClass instead of assuming it's a dataset entity; for the moment, we can skip processing other entity types. WDYT?

            properties_aspect = wu.get_aspect_of_type(DatasetPropertiesClass)

DatasetPropertiesClass is only present for entity dataset. For other entities, it would be absent so would return None. So its safe.

I would update description once this config and workunit processor is adopted for other entities. Also planning a quick followup with addressing TODOs in this PR. Will make changes in there.