So, the temporary passphrase option is not for long term hodling, right?
No.
Temporary only means that passphrase will be only temporary used, so when you turn your device off and turned it back on it won't be available.
Only way to add this account with that passphrase is by importing it on new device or if you do reset of your old device.
You can hold coins in addresses generated this way for however long you want, short ir long term.
Like, after the given duration of a temporary passphrase session is over, what happens to the coins on those addresses?
Coins are never stored on your device but they are on blockchain, it's just keys and PIN codes stored on device.
There is no duration or expiration time for passphrases, they are permanent.
PS
I never personally used passphrase option for ledger wallet because I don't like it's connection with PIN code.