JupyterLite 0.4.0 was released a couple of days ago: https://github.com/jupyterlite/jupyterlite/releases/tag/v0.4.0
#193 relaxed the dependency on jupyterlite-core to be able to use the new version, but it has not been released yet.
I think we can release 0.16.3 now to allow using the latest jupyterlite-sphinx and jupyterlite-core together.
cc @steppi @Carreau @martinRenou for awareness