OP, if you feel that the $280 USD that you spent on your friend's used Series S is too much for your child, then return it right away ASAP (assuming it's still in return period as you mentioned), get your full refund and give the balance/difference to your friend.
Wait for holiday sales, and get a new One S or One SAD for $150-$200 USD probably a couple of digital games or game pass subs thrown in. Even get a used One S for $100-$150 (US) if you can't find a new deal.
You said you have a 1080p TV. It probably is 60Hz, and not 120. Your child does not need ray tracing and the SSD I/O velocity architectural benefits of the new Xbox Series.
The One S is more than enough for him "now". Since you're worried about the storage space, use the remaining money you will for sure have, to buy a 4TB external drive for around $95-$100 USD.
Your son is set until 2024. By then Microsoft will release the Xbox Series XX and the Xbox Series SS. You upgrade from your Series X to the Series XX.
Sell your son's 1080p TV and the Xbox One S for whatever money it fetches at that point in time. Get him a used TCL 6 Series R635 (currently around $600 USD brand new, you'll get it for way cheaper used by then) and give him your Series X that you're currently using.
This is the time period Microsoft and Sony will have started to have released their true nextgen only releases like Fable, Avowed, Hellblade 2, i.e, both their first years not being crossgen (excluding games like Demon's Souls, RnC A Rift Apart and Returnal of course), and both you and your son can enjoy nextgen at its fullest. You being at high framerate and him at 30 fps quality mode or 60 fps performance.
This is the best ideal upgrade I can think of for the both of you, in your current situation.