alt Hacker NewsMultiple X sessions has been possible for decades. I think its possible with Wayland too.
You can also start applications as another user so you do not even need multiple sessions.
There are quite a lot of privilege escalation attacks so I am not sure this is sufficiently solid.
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Possible and available without any specific configuration on my side (except creating the user) are different things. I know I managed it many years ago with some effort, but nowadays it was just available.
You are correct that it should not be seen as a perfect protection, but considering the effort to set it up I see it as worth it. By seeing in this thread how many people do not use anything similar (ex: containers, separate users, etc), I hope attackers will just be lazy and target those people first, why bother with a local privilege escalation when interesting data is just in the same account?
It's off topic, and it was also possible for decades, but:
you can connect two sets of mouse, keyboard and monitor to one PC and have two people using it, each running their own X session. The true multi boxing!