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The 80186 didn’t really introduce anything new architecturally. It’s basically an 8086 with a few more chips bundled on-die. 80286 however introduced protected mode, expanded the address size to 24 bit, hardware enforce memory protection, multitasking, etc.

80186 Was not IBM PC compatible. It had e.g. a PIC, DMA and timer built-in, and these were incompatible with the chips in a 8086 based IBM PC.

There were a few new instructions, too, mostly closing holes. You could left or right shift with a constant, while the 8086 had only 1 or the CX register. I think mul also gained a constant.

The fact that Intel released a CPU that could not be put in a PC probably indicates how low they estimated the survivability of the PC.

There were "PC compatibles" that used it, like the Tandy 2000. You are correct in that they may not have been entirely compatible, but they did exist.

I had a tandy of that era, with i think 64K ram. The incompatibilities were big enough that almost nothing could run.

I believe 80186 was for embedded systems.

nope