I was considering it after first playing that game, the main problem is of course that it works best WITH IK like they are using as you can pass your hands through the surface and slightly above it and still retain contact with the controls (the IK is “sticky to the surface”. Their IK system, while not perfect, is well tuned for the actual interaction part and plays a large role in why it works so well for them.
The actual “touch” with widgets capability would be easy to do with either baseline widget interaction components with a very short trace, or extended widget interaction components that implements a touch on hover. 90% of the functionality is already covered in engine by the widget interaction components honestly, with maybe some slight quality of life tweaks.