Alrighty had to sleep because it was late into the night but I found the cause and fixed it. Issue wasn’t SDDM but a “missing” piece of an environment variable.
I looked at the journals and systemd unit status today and saw that plasma-workspace.service was failing. It was trying to load the themes by looking at $XDG_DATA_DIRS variable, the logs were somewhat similar to the ones posted here on archlinux forums. The interesting bit was that $XDG_DATA_DIRS did not contain the /usr/share/:/usr/local/share/ paths which is basically the default system managed paths for these configs.
Fixed it by explicitly setting $XDG_DATA_DIRS with the default system paths in /etc/environment file. Haven’t managed to narrow down why it was missing in the first place.