To me its a bit like tap to pay vs magnetic credit cards. Eventually tap to pay replaces all other ways of paying much like AR might replace all other screen interactions. But FIRST it should replace something critical. In the payment space this was subway entrances where people needed to pay quick and get through.
The reason it takes so long for full adoption is because its very challenging to replace something like magnetic credit card that “works pretty well”. From my point of view, the iPhone “works pretty well” and its going to towards the END of the innovation cycle when other screen usage gets folded into these spatial platforms
The most important part of a WFH setup is desk + chair. That's where the comfort is, much more so than a big screen - which is certainly nice.
Desk + chair is what takes up space though. Once that space is taken, a big monitor is just something you put on it.
As excited I am about this new tech, which looks fantastic from the ad, I don't think it will replace a comfortable desk + chair setup.
I also don't expect it to be super dystopian or replace real life in general, but it could definitely replace the parts where you're already looking at a screen regardless.
It is technically capable of being "life scale" in the way that you describe: it tries to keep a consistent coordinate system across multiple reboots and from room to room and real life objects can occlude virtual objects, but to be honest I have no clue what the average use case will be or how the OS will enforce it.