This would be amazing on a device like the Moto G or something similar. If they get this in the sub $200 or sub $100 price point with reasonable performance, it could be a real big deal.
I'm personally mildly excited for the idea of a "real" Linux phone, if it carries out the concept of being a phone that can be used in desktop/laptop docks (which various people have attempted without success on Android phones) to serve as your one very portable computer. Also it needs to have a competent nav/driving app. Basically the sole thing that keeps me on Android these days is Google Maps, and Google has even been testing me with that since the dreadful redesign they did with 7.x.x.
As far as I'm concerned, the next Linux phone is the Jolla.
They were indeed running Android with Ubuntu in the container, until the container flip a few months ago.
Most mobile devices use an Android kernel since there's far more support for ARM SoCs, etc. with the Android kernel. Plus you can't really run an Android userland without running an Android kernel somewhere; they're intimately tied (see Binder).