In the most recent (Sept) AGOL update it mentions that
Point scene layers load and display up to two times faster by converting them to I3S version 1.7 This allows you to render scenes with large numbers of points more efficiently, such as when visualizing thousands of trees in a rural area.
However when I try and run the i3s converter I get the message Can only convert 3DObject, IntegratedMesh, and Building layer types.
The documentation also states that it's not supported yet.
I happen to be trying to visualize lots of trees for a current project so being able to take advantage of 1.7 would be awesome. is this functionality not quite ready yet or am I just missing an important step?
Nope, you are not missing anything. The PR is currently awaiting review Points 1 7 by rvargasESRI · Pull Request #103 · Esri/i3s-spec · GitHub so once that is pushed in the converter will be able to convert your point slpks to version 1.7. I'll post back here once it has been merged.
Its been updated. Also, keep in mind only ArcGIS Online Scene Viewer supports points 1.7. ArcGIS Pro 2.6 will fall back to 1.6 so you wont see performance improvements until ArcGIS Pro 2.7. Feel free to let me know if you run into any issues!