The New Nintendo 3DS was based around this, and although they abandoned it I think there's still a lot of room for something like it. It's more AR than AR is.
It always seemed gimmicky to me, but I’ve heard that the Mario brothers 3D worked a lot better with the depth element than in any of the remakes (I did it enjoy it just fine on my switch)
I bought a new 3ds and it was absolute bliss. The mario bros 3d game was incredibly intuitive to play, that 3ds has spoiled any 3d platformer for me. I tried playing the new 3d game on the switch and even though it has shadows, I kept missing platforms etc.
I think the original 3ds's lack of tracking is what turned it off for most people, though.
No, it relied on the fact that the player would ~always be looking straight at the screen at a relatively fixed distance. There was a slider you could use to set the strength of the depth effect, all the way to disabling it completely.
It was fun and worked pretty well, but it was very much a gimmick.
EDIT: Just saw the other comment, I didn't know the New 3DS had actual eye tracking. Neat!
