Personally, I look at it as follows.

Long-term, cash loses about 30% per decade to inflation, so I'd rather be fully invested in things that help asset growth. However, in any asset class that provides growth, there will be down years. The bigger the average growth, the bigger the occasional drop.

Ideally, I'd like to have a portfolio of assets where each provides >10% average annual return, but with the different assets having negative correlation. That way, I can always sell something that's up, or at least not down, to cover current expenses. The problem is finding such a set of assets. Currently, it seems that stocks and real estate are high, possibly too high. Bonds are a possibility, but those too can drop if the Fed keeps tightening. Also, I don't like bonds' long-term real return of 1-2%/year.

Still, the 4% rule and its like assume being fully invested (for Bengen's 1990s 4% research, 50/50 stocks/bonds). Having cash reduces your long-term returns more than you save by avoiding the forced sale of depressed assets.

All the above leads me to the conclusion that having liquid, low-risk assets is critical in retirement to avoid needing to sell risk assets when they're low, but you want something that offers at least some positive real return. These days, that can be CDs, high-interest savings and checking accounts, etc. that offer >4.5% with projected inflation of 3.5-4%.

However, "larger than necessary" cash position is (a) not terribly well defined, and (b) by definition, more than needed so you'll lose more value to inflation than you have to.

I hope that somewhat rambling response was helpful.