It's just that AR/VR is not interactive. Sure they try to simulate interactivity through buttons or hands tracking but its lame and fake.
Even when have indistinguishable from reality visuals the illusion falls apart the moment you try to touch it. The fidelity through buttons is rudimentary and through hand tracking is non existent. The suspension of disbelief isn't there, humans fingers are incredibly sensitive and dexterous and we are trained whole life all the time to know how things feel. AI/AR isn't going to have any success without solving that.
That tracks with how great it feels when you match the positions of the virtual and real wheels when simracing. Peeking under the lenses you see your own arms seamlessly continue into the virtual ones and feels like you are grabbing the virtual wheel.
The VOID VR was the greatest fusion of VR + reality. CAD-mapped laser tag warehouses while wearing a VR headset and backpack computer. Near-perfect immersion. COVID sadly killed it. Was a beautiful thing - so happy I got to try it out. Even ended up buying a lot of the defunct equipment off eBay.
https://www.youtube.com/watch?v=Oad_t6k3w5c