Spycoo16 Sims 4 has both a DirectX 9 mode and a DirectX 11 mode. At the moment, the game defaults to DX11 when it detects an Nvidia or AMD GPU and DX9 mode for Intel. However, players with your family of processor and graphics chip typically get a very specific error when trying to play Sims 4 in DX9 mode, and this error goes away in DX11 mode.
Further, it's public knowledge that Intel kind of punted on DirectX 9 compatibility for a while with its graphics drivers. This doesn't affect all DX9 games equally, but it has definitely been a problem in non-Sims games. And I've seen a few users with the same Sims 3 error as your dxdiag lists and the same class of graphics chip, so I'm making an educated guess here.
Further, Intel apparently fixed the general DX9 issue in the November driver release, or at least it's fixed for Sims 4. That's why I'm suggesting you update your driver.
The driver I linked is made for your processor and graphics chip, among others, and Intel guarantees its compatibility. It is generally best to use the driver a laptop manufacturer provides for your machine, if it works for your purposes, but it's not harmful to try a different one, at least in theory.
Yes, of course installing a graphics driver can negatively impact your system. It never should, but things do happen, and even all the manufacturers occasionally release a driver with some kind of bug. That's why Microsoft offers the option to roll back a driver, in the Device Manager when you right-click the name of the device in question. That's also why we have tools like Display Driver Uninstaller, which lets you cleanly remove the driver and install the one of your choice. Here are instructions:
https://crinrict.com/blog/2019/02/clean-re-install-of-graphics-drivers-with-display-driver-uninstaller-ddu.html
Here is the latest driver Lenovo offers for your laptop, also the version you currently have installed:
https://pcsupport.lenovo.com/us/en/products/laptops-and-netbooks/yoga-series/yoga-9-14irp8/83b1/83b1001wus/downloads/driver-list/component?name=Display%20and%20Video%20Graphics&id=635380F4-448F-4129-AA77-265289D96F6F
So go ahead and try the driver I linked, and if you don't like the results, reverting should take between 30 seconds and a few minutes, not counting the time it takes to restart your computer.
