Sure, you'd still have video capture and hardware controlled cheats but those can be mitigated as well. No FPS that I know of has a "max turn rate" due to the twitchiness of the mouse. Want to look behind you and then back in front in 2ms? Crank your mouse sensitivity all the way up. I've seen some hardware mouse controller cheats in the wild. They aren't that good. There was one that used a video feed and AI to "software control" the mouse but that can be detected as well by reading from the hardware directly. Mouse input is pretty standard USBHID shit.

Find cvcheat with a quick Google. Looks like the site is not in English though. Curious to learn more, it’s fascinating problem and rat race. Wonder how this tech would fair against csgo over watch.

It at least rules out wall hacks and certain classes of aimbots.

Yes, but those are external anyway so a kernel-based anti-cheat system wouldn't be able to catch them anyway. The point is to be better than the invasive stuff we have now.