It'd break if you wanted to do the dumbest thing and just not stream the windows users aren't looking at; but lowering the stream resolution on the fly could work but now involves more complexity (on both sides to communicate when to adjust the resolution) and because it's not handled entirely on-device breaks the illusion of it being invisible.

I can also imagine it having some weird privacy implications; like Mac apps somehow monitoring this and tracking whether you're actually looking at them, etc.

If you're OK with rendering everything at high resolution (and then choosing what quality to send over) then you shouldn't have any privacy issues, assuming that this part is done by the OS.

Foveated rendering don't work but not the way described in GP; human eyes are too fast against current latency and frame intervals for it to work.