Back in the day, I created a font called "Scribble Flinger" that would put smudges and stains throughout if you enabled the contextual alternates. I came up with several alternates for each glyph, and was pretty pleased with the result.

It's a free font, and I occasionally see it used in posters for rock shows or other "alternate" events.

But your point is right on. I only created three alternates per glyph, if I remember correctly, so if you were to try to use it for an entire page of text, it would reveal its tricks pretty quickly. For just a title or header, I think it holds up.

They definitely work better for short text, primarily titles and logotypes. If you only have a few instances of, say, lowercase "a", then it's going to be fine if you only have a few alternate glyphs.

(Having said that, there's definitely a bit of craft, if not art, in choosing the right glyphs and getting the kerning right.)

It especially stands out when you see repeated letters after each other in the same word, like "egg". Seems like a situation where font ligatures could be used to automatically fix it.