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Haven't USB hubs done this since USB 1.1?

I believe that the author is talking about plugging in a USB-C cable between your laptop and some headless system, and having your laptop send HID data, while also capturing a display output from the headless system

Isn't that exactly what a USB-C docking station does? It receives display and audio data, and acts as a USB device (keyboard, mouse, webcam). You'd need hardware that can receive DisplayPort, but it's doable.

Looks like an Alt Mode host with DP sink capability is technically allowed...? But it also looks like USB host controllers with Alt Mode support exposes internal DP source driver inputs, rather than handing you bunch of bare copper wires in Alt Mode, so I doubt it realistically has an implementation.

ref: https://vesa.org/wp-content/uploads/2019/10/USB-DevDays-2019...

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