Earlier quoted context omitted.
USB Type C provides a standardized protocol for protocol negotiation. I assume that Thunderbolt uses that. It's already used in Type C to enable plugging in USB, chargers (PD spec), HDMI or DP adapters ( https://www.chromium.org/chromium-os/dingdong ) and I think even to route PCIe over Type C. Adding Thunderbolt to the mix shouldn't be too hard.
I think the issue is, that if you have a thunderbolt over USB-C display, and plug it into a normal USB-C port on your laptop (say the latest macbook), it won't work, since the laptop doesn't support the thunderbolt signaling. So it's a new point of confusion - USB devices which are physically compatible but not electrically. It's something that could possibly be solved through the markings on the devices etc and I st…
It seems like an ideal way for Apple to be able to ship a display which can be connected to both thunderbolt and USB-C hosts, without the user having to care.
Obviously some Thunderbolt devices (e.g. PCI-E chassis) wouldn't reasonably be able to degrade to USB, but a good proportion of them, would.
I very much hope this is what is going to happen!