Has it become a cultural icon though? I mean yeah 80's/90's kids remember it but I don't know if the younger generations would see it that way.
When you put it like that, then the "icon" status becomes trivial so cannot even give a definitive answer. Because it would be like asking the same about some iconic American movie posters like "The Thing".
Another aspect is why what younger generations think or believe even matters? Why their opinions cancel out the whole culture and icon status of ideas?
If you ask younger generation they cannot comprehend why radio was so important in daily live and was like some magical object lol. Rather they probably have no idea what radio is despite they are high school kids now. So when I say how iconic and "advanced technology" radio was at its time and then you say "it may be but we as younger generation is not that amazed" then I would have no idea what to tell them.
If you are in video game culture you would know the existence of Phalanx because it's rather a popular game so you would know its artwork. I don't mean to say the game is "widely know fundamental video games everyone knows" like Super Mario because it's in another level, but if we have to take it in "new generation kids" aspect then you shouldn't surprise if they have no idea GTA 5 exist because they are mostly mobile gamers or online competitive gamers who only like Counter-Strike, Valorant, Genshin Impact and whatnot. Then in this context opinion of new generation kids doesn't even matter to consider when you work for a video game company and you add their subjectivity into statistical studies to decide which video game would be a hit. Because still to this day age range of video gamers are way older than younger people who play video games and it keeps being older.
Even around 2000 video game age range perhaps was around 15-20, now these kids grew up and became like 30-50 years old gamers. In that context when you care a lot about what new generation kids thinks then you mistakenly develop a video game like Concord and expect it to sell well. It obviously won't and I shouldn't have to explain it to Sony when they have way more experience than me but they have way less common sense and knowledge than me lololol. Concord is judged by people who are old enough to have their grown up kids, those who know what Phalanx is, those who witnessed either all video game history or half of it, so excuse them for not being interested in Concord. And then high price childish video game that's so generic copy paste won't sell at all for not many adult would buy such a digital rubbish game to their kids and not many would play themselves so no wonder Concord crashed hard.
Everyone will be wise if they just ignore what new generation kids think because they mostly do instead of thinking. Their whole sense of self is sucked by trends and popularity, way more than in any era in the history of world. As a result they are part of mindless customer types that only can be attracted by playing on their primitive urges. This method is also used by any company who are in pet industry lolol.
So to answer your main idea: They would have no particular opinion about how it looks like. It was just a weird decision to even make it look like that so it meant something for people in that era, but that's why it was iconic.
For example why was Greek mythology was a big thing? It satisfied people. It was a fun story and a religion to believe in. Gotta admit it was the best scientific explanation people could came up with to make sense their nonsense universe and existence. Naturally when people didn't know much but they knew about Greek mythology they thought it's very important than they should. It became a sign of their life, and therefore important part of their lives. That's why anything can be an icon. Something very different and something familiar.
Now kids are exposed to many stories, so it would be hard for them to comprehend why people literally lived their life with Greek mythology. It's also why religion keeps being a something people don't care much anymore, especially because they are distracted with many things anymore. Kinda, if something cannot distract them in a huge way it cannot be iconic.
So what to think about what kids think now is all about fake robbing for Youtube videos, Tiktok dance, Tiktok challenge, attracting opposite sex on Instagram, tons of dating apps, some random gacha game, internet memes and whatever is popular and trends. On top of it they are more pressured in academic pursuits because to get a decent job that will help you to survive you rather necessarily require university diploma and one diploma is not enough. You need experience with personal projects on top of being a student because when you are fresh out of university they will demand 10 years experience and you should be younger than 21 then. As a result new generation kids grow up without able to realize they are a child or they should live their childhood, they are brainwashed into thinking instead of being a person they should fill their CV. As a result new generation is a corporate zombie material who will be mindless customer type more than ever. So what they think won't matter because they don't even think. However among them there are rare kids who think too much. Their only Jesus who has the potential to fix their generation is these kids lol.
However if a 10 years old kid today who really has an interest in video game culture, they would know Phalanx and understand the icon situation about the box art. It's all about the culture you care about instead of being in the age-range or whatever generation you belong to. This is why people who care about specific art cultures can understand what certain paintings and whatnot is really an "icon" like "The Garden of Earthly Delights". For example Mona Lisa is an icon but if some kid says "I don't understand why it's liked or why it's icon" then it mean the kid doesn't even care about visual art culture. Mona Lisa is not icon because it's liked or "legendary", it's because "different" on anything about it. However Mona Lisa is not "legendary" akin to how Super Mario is legendary in video game industry despite like it or not.No one has to be 1000 years old to understand icon status of ancient stuff, so this logic applies to every aspect of a culture.