The idea is that the desktop would send the content of the rectangle occluded by the phone screen and the phone displays it, appropriately tweaked, tinted etc. I have no idea if it would work well enough to be useful but seems like a fun experiment.
I find myself using the Camo setup with the phone in front of the screen and I just "look around it" - I dislike the "looking into space" on calls more than the inconvenience of moving my windows a bit I guess.