I actually bought a 'cheap' laptop ($200 on sale after adding an SDD upgrade) under the assumption that it would be a placeholder and it turned out to be good enough apart from battery life that I'm still happily using it (the fact that it's totally silent and cool is a big selling point). Some conclusions I've come to after using it for about a year are:
4GB is surprisingly good for Windows 10 if you're only doing light web browsing, Netflix and Office programs. By comparison I've used or upgraded a Windows 8 tablet with 1GB and Windows 10 laptop with 2GB and both had frequent and noticeable lag from the page swapping. While 4GB would be a bottleneck with a faster CPU or with slow enough storage I've discovered that it's actually fine in an ultra budget machine.
32GB is not enough storage and eMMC (rather than SSD) should be avoided if possible. While Microsoft has made some adjustments so that Windows 10 can actually do feature updates on drives this small you are still probably going to run into issues eventually. It's unfortunate that many budget machines still insist of shipping with this as the only option. Fortunately the cheap Chinese clone I bought had the ability to install a regular SSD and so a few bucks later I had a fast 120GB bootdrive and a 32GB D drive. I did however try the machine out with the original storage and my impressions were that eMMC is fast enough to not be a bother for everyday use, however it is a noticeable bottleneck when doing any updates or copying big media files. So ideally you want an SSD or the ability to add one, but a 64GB+ eMMC drive wouldn't be a complete dealbreaker.
The screen matters a lot. My cheap laptop has a 13" 1080p IPS screen. It's not the best IPS by a very long shot but it's bright and clear and that's what's important. Similarly my tablet (HP Stream 7) had an IPS display and it made a world of difference over similarly budget priced Android tablets with their faded TFT panels. A dull or difficult to see screen will severely hinder every moment that you are using the machine, it will always feel like a handicap. While personally I could never use one of those 1366x768 displays because of my need for information density I could see one working as long as it's a bright enough IPS.
Low end processors work but it's a mindfield as to which ones are up to the task and which ones aren't because the numbering often doesn't have anything to do with speed (so a higher numbered CPU may literally have half the performance). Two nearly identical CPUs that are common in low end laptops and that work well enough for basic tasks are the Celeron N3450 and Pentium N4200 (also anything in the N5xxx range is good but many N3xxx and N4xxx are very slow). They aren't especially fast which is noticeable when you first open a Youtube video and the list of recommendations at the side clearly lags in loading, but they are rarely too slow for basic tasks (they will top out at playing a single 1080p video, so 4K streaming is completely out). A nice advantage of these 6W processors is that they are so easy to run fanless that your SSD will be the only thing you ever feel warm up. Personally I'd avoid anything from AMD in the this space (unless it's Ryzen) since to my dissatisfaction they haven't made anything for the ultra budget laptop category since the A series and those are virtually all terrible.