It still competes with their CPU business if it takes fab capacity they could otherwise use for (much higher margin!) CPUs. I suspect, as the linked article posits, this is a hedge. They want to maintain the capability to do on-contract fab work, so partnering with a handful of small volume firms (who can be purchased if it turns out they are successful) makes sense.
Intel won't be hooking up with a big ARM SoC designer any time soon.
Yes, if there is a market for their higher end CPU business then that would make sense, but presumably they would be using those fabs for that business if they thought there was a market for those units at this point.
I'm saying that Intel may think that the market size for computer processors will continue to grow and this would be space they could fill if necessarily. Realistically though, they would probably just build more fabs.
They are also building one in China. A fab produces an enormous number of chips, they are building more capacity than is currently required by the market.
Intel won't be hooking up with a big ARM SoC designer any time soon.